New York Governor Eliot Spitzer, in testimony to the House of Representatives finance committee, laid the blame at the feet of federal regulators and ratings agencies, who failed to stop the growth of the subprime mortgage bubble before it got out of control.
Many officials at the Fed had been fretting about the growth of a financial bubble in America, and the risk that it might have exploded into future inflation.
While this was misguided, tax revenues were booming (in part because of genuine growth and in part because of the bubble) and it seemed like bigger government was a free lunch.
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In the late 1990s the seemingly boundless corporate spending on servers and computers in the heady days of the dot-com bubble fueled the growth of the semiconductor industry.
More worrying is the absence of obvious sources of growth after the bursting of Spain's property bubble.
If social media, and in this case, LinkedIn, manages to make true on its promises and delivers solid top and bottom-line growth, then talk of a bubble is no more than pure speculation.
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The central bank had pushed rates down to encourage economic growth after the bursting of the technology bubble in the stock market in 2000 and the terrorist attacks of Sept. 11, 2001.
Blitzstein expects, however, to see a slowing of growth rather than a burst bubble in part because the trend isn't dependent on one industry, but on an entire economy seeing the value in data.
And this includes, as we agreed with our G20 partners at Pittsburgh, to replacing the old cycle of bubble and bust with growth that is balanced and sustained.
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Such levels would be nearly 200 basis points above the prior peak reached at the height of the credit-induced global growth bubble.
Broker-dealers like the former Bear Stearns played an increasingly important role in lending during the bubble years, in the growth of the commercial paper market, structured investment products and derivatives trading.
After a decade of tepid growth and some years of job losses, Silicon Valley has blown itself another huge tech bubble, this time driven by the social media craze and a surge in private-equity investment.
All three areas have turned in some of the fastest growth of real estate-driven new money in recent years, and all are feeling the burst of the bubble now.
The problem with this strategy, however, is that Cisco end up paying top prices for Net Speed and Growth Networks acquired at the peak of the high-tech bubble.
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The new leaders, who take charge in March, will now have to find the right balance between trying to prevent the formation of a property bubble and keeping a healthy growth rate going.
Coming out of a recession also necessitates different strategies than a growth bubble.
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In America, where we also identified a potential house-price bubble, the 12-month rate of growth in home prices slowed to 5.6% in the year to the second quarter, the slowest rate of increase since 1999.
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However, its margins and growth seem so bubble like, that the counter argument is these levels of business are unsustainable.
Residential real-estate is in the spotlight in China as the government attempts to revive growth without causing a property bubble, as I report in the current issue of Forbes Asia ( read here).
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Because the early days of a bubble create optimism, and optimism fuels hiring, spending and growth.
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The consequent bursting of that bubble has been painful for the economy, with virtually no growth in the four years to 1995.
At the mere mention of the word bubble, he brandishes a recent magazine article charting job growth in the U.S. over the past five years.
And there is no question that the uncontrolled growth of Fannie Mae and Freddie Mac and their movement to riskier mortgage products propelled the housing bubble.
Fearing a bubble, government officials have taken a myriad of steps to reign in the breakneck growth of the real estate market.
As we have noted in past Monetary Watch commentaries, the run-up to the now infamous housing bubble turn credit implosion turn Great Recession saw a string of 36 months of double digit growth.
To put those numbers into perspective, the run-up to the now infamous housing bubble turn credit implosion turn Great Recession saw a string of 36 months of double digit growth for a cumulative increase of 48%.
As readers of the Monetary Watch are aware, the run-up to the housing bubble turn credit implosion turn Great Recession saw a string of 36 months of double digit growth for a cumulative increase of 48%.
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The differences in GDP growth will affect the exchange rate and relative levels of wealth in China and the U.S. The housing bubble in China continues to be controlled, and property prices in most of the larger cities will increase in the next 12 to 24 months.
This forces market participants to take risk more seriously, pushing up interest rates for other reckless borrowers, driving painful fiscal adjustments that will eventually correct the misallocation of resources caused by the bubble, returning them to the private sector and, eventually, permitting a renewal of sustainable growth.
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