Business

This week we discussed Algebris Investments’ ranking of the world’s largest financial bubbles. London property ranked second on the list, behind Australian property (see here). There is growing evidence the former is bursting. In its October 2017 survey, the Royal Institute of Chartered Surveyors (RICS) reported the largest proportion of respondents seeing a drop in London house prices versus the previous month since 2009. The net balance at nearly two thirds (-63%) in the capital contrasted sharply with a national average which was marginally in positive territory (+1%).

If only every year was this “easy”.

Unfortunately, the old adage of the trend being your friend becomes harder to adhere to as a guidepost as one asset market after another goes into bubble territory. As we discussed here, Alberto Gallo of Algebris Investments has ranked (see here) the top 14 bubbles worldwide, according to characteristics such as duration, appreciation, valuation and the degree of irrational behaviour.

Authored by Gail Tverberg via Our Finite World blog,

It is easy for those of us in the West to overlook how important China has become to the world economy, and also the limits it is reaching. The two big areas in which China seems to be reaching limits are energy production and debt. Reaching either of these limits could eventually cause a collapse.

While many in the financial services industry are dreading the day that AI technology becomes advanced enough to render broad swaths of the human workforce obsolete, Deutsche Bank’s John Cryan ironically sees the technology as something that might help him save his job.

Authored by Hal Snarr via The Mises Institute,

The Federal Reserve’s latest Survey of Consumer Finances, according to Federal Reserve Governor Brainard, shows that the share of income held by the top 1 percent of households has risen from 17 percent in 1988 to 24 percent in 2015, and that the wealth held by that same group rose from 30 percent in 1989 to 39 percent in 2016.