Bubble trouble spots to watch

Bubbles are the bane of financial markets and economies. Overinflated prices funnel extraordinary levels of cash into surging assets, only to find they are built on sand. Prices tumble. Bankruptcies soar. Recessions beckon.

Subprime mortgages, the dotcom bust and the roaring stock market of the 1920s are famous examples. The South Sea Bubble of the 18th century and “tulip mania” in the 17th show that irrational markets have been with us for hundreds of years.

Source: businesslive.co.za