Nobel Prize winner warns of US stock market bubble
Published: Monday, 2 Dec 2013 | 4:23 AM ET
By: Matt Clinch | Assistant Producer
A sharp rise in U.S. equity prices could be leading to a dangerous bubble, according to one of the three Americans who won the 2013 Nobel prize for economics.
"I'm not sounding the alarm yet. But in many countries the stock price levels are high, and in many real estate markets prices have risen sharply...that could end badly."
"I find the boom in the U.S. stock market most concerning," Robert Shiller said in an interview with Germany's Der Spiegel magazine published on Sunday.
(Read More: Faber: 'We are in a massive speculative bubble')
He added that this was a key concern because the U.S. economy was "still weak and vulnerable". The real estate market in Brazil was also worrying, he said. He said that at a recent conference he attended in the country, the sharp jump in house prices had been attributed to a growing middle class and a positive economic developments.
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He saw many similarities with the U.S. housing boom of the mid-2000s.
"The world is still very vulnerable to bubbles," he said.
Schiller won the Nobel prize economics in October for his research that has improved the forecasting of asset prices in the long term and helped the emergence of index funds in stock markets. He was awarded the 8 million crown ($1.25 million) prize alongside fellow economists Eugene Fama and Lars Peter Hansen.
(Read More: The Fed has created a huge global bubble: Stockman)
At the ceremony in Sweden, Schiller to
There is no seller when it is low. They just sell it back and forth. But when it is high, they sell is to you, the little guys.
That why we have the greatest game on earth in the stock markets. FREE was .17 few weeks ago when I first posted it will jump. Now .50