The Other Bubble ...

No, it's not real estate. It's poker. PartyPoker.com's parent company went public at a whopping $8.5B. The World Series of Poker has swollen to proportions even large for Vegas.

Why now? In a bear market, gambling soars. California is trying to join the multistate Super Lotto with even larger payouts at even worse odds. Vegas is hopping in the middle of summer with temperatures at 105 degrees F. Indian casinos grow like wampum all over the country. But aren't we in a bull market? Unemployment is at a very low 5%, the economy has been growing around 3.5% per year, and the market while in a trading range is near new highs in the Dow. Yet the New York Times reports today that real estate is driving the economy:

Encompassing everything from land surveyors to general contractors to loan officers, the sprawling [real estate] sector has added 700,000 jobs to the nation's payrolls over the last four years, according to an analysis by Economy.com, a research firm. ... Combined, the rest of the economy has lost nearly 400,000 jobs over the same span, which stretches back to the start of the most recent recession, in 2001.

Hence, when the other other bubble, real estate, bursts, the illusion of prosperity driven by excessive borrowing will be shattered. What will be left is - more gambling! PartyPoker, anyone?

Comments

[Trading for Dow 18,000]

With Gold about to put in its final Elliott low run down to $200 then a new run above $800....here's an interesting article...

http://www.lewrockwell.com/blumen/blumen6.html

Hyperinflation also happened to Germany late in its empire.

Hyperinflation hitting America over the next 3 decades could easily re-value the Dow up to a 100,000 which say only had a true adjusted value of 30,000-40,000 in 2005 dollars.

Comments?