Roubini: Watch These Bubbles About to Pop

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Nov. 7 (Bloomberg) -- NYU Stern Business School Professor Nouriel Roubini discusses he risk of asset bubbles on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Ago -- bubbles, a week ago, "bubbles in the broth" -- nouriel, we are potentially in dangerous territory?

We are for the following reason.

Economic activity is recovering, growth is low, inflation is low.

That is why we have zero policy rates.

We have credit easing.

If i'm reading between the lines, it doesn't sound like you think this could end well.

The fed is doing it, the ecb is doing it, the bank of england, bank of japan.

Instead of good inflation [indiscernible] we are maybe not in bubble territory, but if you look at housing around the world, sweden, norway, france, germany, israel, brazil, hong kong, china, we have frothing as if not outright bubbles in many parts of the world because interests are low all over the world.

You look at freddie.

Those are signals of frothing us, if not outright bubble.

In the tech sector, there is significant frothing us -- frothiness.

I know a private transaction where large tech firms are requiring firms that are startups at 60 times not revenues, but 60 times forward revenues for firms that don't have any revenues today.

You are talking about just the u.s. here?

A moment ago you were saying mario draghi is behind the curve by not giving enough liquidity.

Is it just that europe is so far behind where we are?

In europe, they have a situation where the frothiness in housing is especially in germany and france, where the rest of the eu is in recession.

If you worry about frothiness in housing in germany, you can tighten up your underwriting standards for mortgages.

That is the solution that most of the banks -- you are talking about housing bubbles around the world.

What about the u.s.? home prices have fallen from the peak, 30%. do you worry about a stock market bubble?

Not at current levels, but with earnings growth, revenue growth is slowing down, while single digits have returns on u.s. equities are justified of those were closer to the levels of 20% plus, that may be a sign of frothiness, you have a wall of liquidity with the fed still doing qe,. that is leading us to inflation, eventually into bubbles.

Coming up, putting our growth in perspective.

Nouriel will show us why today's

This text has been automatically generated. It may not be 100% accurate.


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