tag:blogger.com,1999:blog-1733055727818619868.post288110587000084072..comments2024-03-09T09:45:35.122+01:00Comments on Gswede Sunday: World Financial Crisis - Are you swimming or sinking?Unknownnoreply@blogger.comBlogger1125tag:blogger.com,1999:blog-1733055727818619868.post-43373680122926981252008-10-13T16:31:00.000+02:002008-10-13T16:31:00.000+02:00Economists say that a financial asset exhibits a ...Economists say that a financial asset exhibits a bubble when its price exceeds the value of the future income that would be received by owning it to maturity. If most market participants buy the asset primarily in hopes of selling it later at a higher price, instead of buying it for the income it will generate, this could be evidence that a bubble is present. If there is a bubble, there is also a risk of a crash in asset prices: market participants will go on buying only as long as they expect others to buy, and when many decide to sell the price will fall. However, it is difficult to tell in practice whether an asset's price actually equals its fundamental value, so it is hard to detect bubbles reliably. Some economists insist that bubbles never or almost never occur.<BR/>--------------------------------------------<BR/>francis<BR/><A HREF="http://www.drivenwide.com" REL="nofollow">Link Building</A>Anonymousnoreply@blogger.com