The stock market- and real estate-bubble occur in advanced
capitalism. The government response was to create a second bubble,
the great bubble transfer. The real estate bubble crashed last
summer. John Bellamy Foster teaches at the University of Oregon and
is editor of Monthly Review. Financialialization is the shift from
production to finance. The economy has slowed down for decades.
Real wages have not gone up but have stagnated for 30 years.
Consumption has been based mainly on borrowing. Speculation
provided stimulus and kept the economy from sinking. Bundling risk
enabled expanding the mortgage market. Structured investment
vehicles (SIVs) were created so risks did not appear on the balance
sheets. All this created greater risk like a bunch of fire crackers
bundled together.