When the economic conditions (low interest rates) collapsed in response to the crisis, a bubble was declared as housing prices snapped back to levels from several years earlier due to tens of thousands of home foreclosures across the country and the subsequent increase in supply of cheap homes, found as a result of banks unloading homes they had foreclosed on. At the core of the issue was a so-called “housing bubble” wherein housing prices in the US rose dramatically as many Americans chased the dream of house ownership without ever doing the math.
To provide an example, the economic crisis that hit the global economic system in 2008 was largely due to market manipulation on mortgage derivatives products that had been constructed to bet against the mortgages taken on by families with low incomes and/or bad credit, at abnormally low interest rates, on the premise that the home owners would default on those loans once interest rates rose again.
It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.” “An economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is “trade in high volumes at prices that are considerably at variance with intrinsic values”. Nothing could be further from the truth, but first we need to define what a bubble actually represents from the perspective of economics: 1) (Modern) Magic Is In A Bubble & It’s About to Burst Here in a nutshell is a deconstruction of common logic fallacies, false facts and misinterpreted theories that are commonly offered up on the topic of Modern in specific and Magic in general, and how you, as an MTGfinance investor can avoid falling into these traps that could ultimately cost you money. The economics of the brand, the company that owns it, and the demographics of our community bear this out. This is a long and detailed article but let me sum things up as follows: Modern’s likely user growth will more than counter any negative interest generated by rising deck costs. Some doomsayers, including one on this very site, have gone so far as to say that we should be selling our Modern cards and heading for higher ground. There has been a lot of talk over the last couple of months about the rising cost of playing Modern and Magic: The Gathering in general. THERE IS NO BUBBLE! LONG LIVE THE BUBBLE!
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