Stock Market Bubble 2011

A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation.Five weeks into 2011, and investors are looking at their first bona fide bubble of 2011.according to share tips all that money sloshing around global markets, led by the Federal Reserve’s massive easing policy, was bound to start igniting various speculative asset classes. Gold surely looked frothy in 2010, and in 2011, it’s copper that’s looking bubble-icious.Behavioral finance theory attributes stock market bubbles to cognitive biases that lead to groupthink and herd behavior. Bubbles occur not only in real-world markets, with their inherent uncertainty and noise, but also in highly predictable experimental markets.In the laboratory, uncertainty is eliminated and calculating the expected returns should be a simple mathematical exercise, because participants are endowed with assets that are defined to have a finite lifespan and a known probability distribution of dividends.

"the 2011 stock market bubble" is going to have a very real impact on American consumers.  As the prices of wheat, corn, pork and oil continue to rise on world markets, share tips provide that it is inevitable that those price increases will be passed on to the rest of us.In the future they might coin this the “Bernanke Effect” or the great stock market of 2011.Stock market bubbles frequently produce hot markets in Initial Public Offerings, since investment bankers and their clients see opportunities to float new stock issues at inflated prices. These hot IPO markets misallocate investment funds to areas dictated by speculative trends, rather than to enterprises generating longstanding economic value.

Stock Market Bubble 2011