, Columnist
The Bubble’s Losing Air. Get Ready for a Crisis
Investors need to focus on their response to financial stresses in an era in which policymakers will be constrained.
Not much to do once it pops.
Photographer: Spencer Platt/Getty Images
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The “everything bubble” is deflating. The fact that it’s happening relatively slowly shouldn’t blind us to the real threat: The world is dangerously underestimating how hard it’ll be to deal with the fallout once it pops.
Frothy markets can’t disguise the warning signs. The shift to tighter monetary policies in the West is putting pressure on global equity and real-estate values. Even more critically, it’s weakening credit markets. Over-indebted emerging markets face headwinds from rising borrowing costs and dollar shortages.