Much of the bubble talk surrounds five companies: Groupon, LinkedIn, Zynga, Facebook and Twitter. Mr. Thiel estimates that those five companies account for three-quarters of the value of new Web companies and, he said, five companies do not make a bubble. If they did, we have bigger problems, he said. “We need technology for our society to get better in the decades ahead,” Mr. Thiel said. “So if you say there are not even five good companies, that even those five companies are fake, that is saying that our society is completely stagnant and that nothing is happening at all.
The nation’s 13.6 trillion yuan ($2 trillion) of new loans in the past 17 months, bigger than the economies of South Korea, Taiwan and Hong Kong combined, is “unprecedented in 400 years of economic history,” said London-based hedge fund manager Hugh Hendry, co-founder of Eclectica Asset Management, which manages $420 million.
Recession-Plagued Nation Demands New Bubble to Invest In.
My view is that markets are still in denial about the structural wreckage of the credit bubble. There are two more boils to lance: China’s investment bubble; and Europe’s banking cover-up. I fear that only then can we clear the rubble and, very slowly, start a fresh cycle.
To be sure, France doesn’t face a U.S.-style mortgage crisis. French banks are generally conservative lenders, nearly all home loans are fixed-rate, and foreclosures are rare. But the housing market had clearly overheated, with prices rising 210% from 1995 to 2008. That’s not quite on a par with the 270% rise in Spain during the same period – but it’s more than the 190% growth posted in the U.S.
