A Better Class Of Bubble (by Louis Gave, GaveKal Capital) - We never tire of pointing out that, when it comes to bubbles, no two bubbles are ever the same

A Better Class Of Bubble (by Louis Gave, GaveKal Capital) - We never tire of pointing out that, when it comes to bubbles, no two bubbles are ever the same. Firstly, bubbles can bid up asset values because of their perceived 'scarcity' (typically land and real estate, but also tulips, or gold...) or because of their productivity (canals, railroads, telecom lines, energy...). This distinction matters because, in the first case, an economy is left with no more land (or gold, or tulips...) than at the outset. In the second case, productive capital has been put in placewhich can still be exploited, either by its current owners, or by a new set of owners. Take the late 1990s bubble as an example: when the Technology-Media-Telecommunication hype imploded, consumers were still left with the ability to make cheaper calls and transfer data more cost-efficiently. In turn, this led to much higher levels of productivity (e.g., the birth of Indian and Filipino call centers), higher growth and improved standards of living... More: (VIEW LINK)