Market Highlights | Nobel Laureate Le: Be wary of property market, stock market and coin bubbles

Some of the hottest deals in the U.S. market are forming bubbles — and Nobel laureate economist Robert Shiller recently vocifered his concerns.

Schiller believes that overheating is mainly focused on real estate, stocks and cryptocurrencies. He said investors have a "Wild West" mentality in these areas.

Linked to the current bubble in the US investment market, the famous economist's remarks have aroused the attention of public opinion.

According to the latest data from the U.S. Real Estate Data Analytics Company, U.S. house prices rose 11.3 percent year-on-year in March, the highest annualized increase since March 2006. Meanwhile, Idaho, Montana and Arizona saw the biggest annual home price gains, up 25 percent, 18.8 percent and 18 percent, respectively.

This is reminiscent of the eve of the last housing bubble in the United States. After the bursting of the housing bubble in hoarding from 2005 to 2007, U.S. housing prices plummeted, triggering the U.S. subprime mortgage crisis from 2007 to 2008, and then quickly dragging the world into the vortex of financial and economic crisis.

In addition, the alarm bells of overheating in the US stock market are also ringing. Shortly before that, the three major stock indexes in the US stock market continued their upward trend, and the Dow and S&P 500 indexes both hit record highs. Since march 2020 lows, the S&P 500 and Dow are up nearly 90 percent, while the technology-focused Nasdaq is up more than 100 percent.

In response, Schiller warned that inflation expectations may eventually pull down long-term asset prices, which is bound to have an impact on the US economy and even the global economy.

The performance of the cryptocurrency market can be described as "thrilling". In April this year, Bitcoin broke through $60,000, but in recent days it has continued to fall, the price has fallen by more than 50% from the peak, 240,000 people have blown up in 24 hours, and 9.6 billion funds have evaporated. Schiller's previous research also argues that the ultimate source of value for cryptocurrencies is uncertain.

In fact, Schiller wasn't the first to make a warning. The Fed's recent semi-annual financial stability report also shows that low interest rates are affecting the real economy, the proportion of new loans with high leverage has reached a record high in recent years, and mortgage defaults have emerged.

At the same time, several Fed professionals have listed cryptocurrencies as a potential risk to financial stability, and the surge in inflation is also one of the highest risks mentioned in the report.