Definition of Bubblecovery
A bubblecovery is a term coined by financial blogger Jesse Colombo to describe what he calls a bubble-driven economic recovery spurred by cheap credit. He says the cheap credit has a tendency to flow into temporary growth-generating speculative endeavours.
According to Mr Colombo, a bubblecovery is what preceded the global financial crisis. He explains that the Federal Reserve was concerned, in the aftermath of the bursting of the dotcom bubble in 2000, that the US jobs market was being slow to recover. In response it slashed interest rates from 6.5 per cent to 1 per cent, leading to a bubble inflating in the housing market. When the Fed then raised interest rates to slow inflation it popped the housing bubble. Jesse Colombo believes the world is gripped in a new bubblecovery being driven by what he calls the CCC Aches – which stands for China, Commodities, Canada, Australia, College (US higher education loans), Healthcare (US healthcare costs), Emerging markets and Social media.
Jesse Colombo gained media attention after the subprime crisis for correctly predicting it.