Bubbles Reinflating, World Bank Warns

Robert Shiller shares a hunch

(NEWSER) - If you’re trying to spot the next big bubble that will roil markets, economist Robert Shiller has a dark horse candidate: Farmland. Sure, farm bubbles are pretty rare—there was only one in the 20th century—but prices for farmland have been booming in the US and UK, Shiller points out in a piece for Project Syndicate . More importantly, “farmland, at least in certain places, seems to have the most contagious ‘new era’ story right now.” More»

(NEWSER) - Stocks tumbled this morning after the release of a grim forecast by the World Bank. The Dow tumbled about 100 points, while the Nasdaq and S&P each dropped 1.6%. The World Bank predicted the economy would shrink 2.9% this year, a big downward revision from its previous forecast of a 1.7% drop. Commodities were declining, with oil down more than a dollar to $68 a barrel. More»

(NEWSER) - After four consecutive weeks of losses, stocks headed south yet again today, with the Dow down 40 points, and the S&P and Nasdaq sliding 0.5% and 0.2% respectively in early trading, the Wall Street Journal reports. The pessimism comes after the World Bank said that the global economy will likely contract for the first time since World War II, with global industrial production down as much as 15% by mid-2009. More»

A few who called last year's calamities correctly see grim days ahead

(NEWSER) - Labeled overly pessimistic for years, a few Wall Street prognosticators became the oracles of 2008 by correctly predicting the unwinding of the global economy, the Wall Street Journal reports. The doomsayers correctly anticipated bank failures, stock market declines, and the housing market collapse of the second half of 2008. As for 2009, don’t expect things to get any rosier, they say. More»

Eliminating levy on profit from home sales encouraged Americans to play the market

(NEWSER) - A tax break introduced by President Clinton and made law in 1997 helped fuel the housing bubble that eventually led to the current economic crisis, the New York Times reports. The cut, which allowed owners to sell their homes without paying capital-gains taxes on profits up to $500,000, created an incentive to pump money into housing rather than other, taxed investment instruments. More»