It doesn't discuss some of the biggest bubbles, those in housing. The US, Japan, and China have all had housing and land price bubbles. They unwound in different ways. In the US it was primarily a credit bubble. Japan had a huge real estate bubble, and it collapsed so hard that the Nikkei index didn't recover for decades.
China's bubble resulted in large numbers of half-finished buildings. That's because China allows selling yet-to-be-built mortgaged apartments to consumers. In the US, you have to get construction financing at a higher rate, and can only get a mortgage on a completed structure. Banks that do construction financing pay out as work progresses, not all up front.
Fracking isn't a bubble. Fracking is a cost reduction technology in an existing market. No need to create a market.
Railways had the "railway mania" period, but track was laid and trains were run. More like a growth spurt than a bubble.
Agree that housing was a missed bubble, but disagree that fracking shouldn’t be considered a bubble.
Fracking certainly is a technology, but the author is using the word to describe the very real market bubble that popped in 2016-2017. It wasn’t as apparent in the public markets (and it is no surprise why you may not have noticed it) but several private operators spent far in excess of generated cash flow, ran out of cash and defaulted. In turn, many of their private equity sponsors blew up or left the space.
Great comment in general, but I have a minor correction: Railway Mania was definitely a bubble. Valuations were overinflated, investors were irrationally exuberant, charlatans funneled up a bunch of dumb money, many rail lines were ultimately not built, and the unwinding of the bubble wiped out many smaller investors and railway companies.
The resulting infrastructure created a lot of value for the UK (similar to the 90s telecom bubble in the US and Canada), but there was definitely a crash that destroyed a lot of people's bank accounts and represented a big dip in the value of the market.
It doesn't discuss some of the biggest bubbles, those in housing. The US, Japan, and China have all had housing and land price bubbles. They unwound in different ways. In the US it was primarily a credit bubble. Japan had a huge real estate bubble, and it collapsed so hard that the Nikkei index didn't recover for decades.
China's bubble resulted in large numbers of half-finished buildings. That's because China allows selling yet-to-be-built mortgaged apartments to consumers. In the US, you have to get construction financing at a higher rate, and can only get a mortgage on a completed structure. Banks that do construction financing pay out as work progresses, not all up front.
Fracking isn't a bubble. Fracking is a cost reduction technology in an existing market. No need to create a market.
Railways had the "railway mania" period, but track was laid and trains were run. More like a growth spurt than a bubble.