Blowing Bubbles

Blowing bubbles is great fun for the young, and young at heart. There is something magical about watching a perfect bubble float off a wand and carelessly meander through the air like a mystical orb. You can lose yourself in that bubble, you can get lost in its beauty, but the magic only lasts for a few seconds until that wondrous bubble pops, as they all unfortunately do. Reminiscing about your childhood glory days can be an easy thing to achieve, especially on those days when nostalgia takes over. However, we are not the only ones that enjoy blowing bubbles, or remembering the past.

Bubbles also seem to be a favorite pass-time of our economy. Unfortunately, for us, these bubbles are in no way magical or exciting, and to be truthful make me feel nauseous rather than nostalgic. Talk about economic recovery needs to be shelved. “We are in the same bubble that led to the last crash,” said Ethan Penner, president of CBRE Capital Partners, explaining that the FED is leading the industry down the same troubled path that led to the downturn in the mid-2000s. “It's incredible to me that we mistakenly believe that pumping untold amounts of liquidity into the market is the answer to the problem to get asset values up.” According to GlobeSt.com, “CBRE Capital Partners CBG, Prudential Real Estate Investors PRU, Dune Capital and Bank of America Merrill Lynch BAC agreed that investors with money burning a hole in their pockets should cool it, for now, at least.”

“Penner said that investors are taking “massive and imprudent risks” to deploy the capital to get the returns they need. “Most money in the world is retirement savings, and most retirement savings are predicated upon achieving a certain actuary return,” he said. “When the FED does what they are doing, it takes all that hard-earned money that wants, craves and needs lower risk profiles, and all of us will end up paying them back in the form of higher taxes. It's just a sham.””

Blowing bubbles might be fun, but not when the economy is blowing the biggest bubbles. I'm almost certain that most people do not want to reminisce about the economic downturn of the mid 2000's, and I am sure that no one wants to have to deal with that same problem again. So, this is my advice. Go to a store, buy some liquid bubbles, and enjoy yourself. It might ease some stress when thinking about another economic bubble.

Do you think we are in the same kind of bubble that we were in a few years ago?

Source article by Jacqueline Hlavenka from GlobeSt.com

#CRE #finance #economy