Sunday, April 17, 2011

Whom to blame for the bubbles?

Prior to 2008, people and investor in particular were financial happy for wide of reasons, unemployment rate was low, housing ownership at all time high, and exceptional profits in the financial markets. However, things changed at the third quarter of 2008 as we were heading, with full speed, into the deepest recession since the great depression. Unsurprisingly, people started to point fingers looking at whom to blame. The person or, precisely, persons to blame are not in Wall Street. They have been in existence for decades, as they were responsible for, sort of to say, every recession or depression we faced. They are Leverage and Over Valuation. Have you spotted the next bubble yet? I will give you a hint. Twitter was valued at $4 billion as of January 2011 with zero revenue. Good Luck!!

Hussain Jubail

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