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How I predicted it:

Started reading short seller message boards. Got deep into the weeds with credit default swaps. Found that you could actually see prices for credit default swaps on markit.com. watched priced for BBB- credit default swaps increase dramatically in early 2007. That was the signal that it was over.

Got back in in early 2012 when the loan rate resets from the housing bubble all tapered off.

Moral of the story: in every bubble the money is coming from somewhere. Figuring out where it is coming from will let you predict the big market turn. If you don't know where it's coming from then you probably shouldn't play with bubbles.

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For me, it was reading Calculated Risk.

Where do you think its coming from now?

China.

You may be right but without context or the background for your educated guess that comes off as a snarky flip.

I would personally add Russia to the mix. The reason is simple: both China and Russia are sources of capital flux, where those with means are funneling funds outside their respective countries.

Because there are, or have been, capital controls in place, those who move money out of their countries are willing to pay a premium for it. Funnily enough, there is a name for the phenomenon where actors with money are willing to pay exorbitant transaction costs in order to move funds from one jurisdictional domain to another.

There's some sort of wit in that last comment, but it's late and I didn't get it. Capital flight?

I’m going to guess that it starts with an “m” and ends with an “oney laundering”

Russia's economy is not that big. About as large as Italy. I seriously doubt they are fueling much except a few oligarchs buying very expensive homes here and there.

I don't think housing is in a bubble except for the Bay Area since new home sales are in a relatively normal range currently[1].

As far as the Bay Area goes it appears to be trickle down from FANG stocks buying up VC backed companies and the associated recycling of those proceeds into new ventures. There's also a bit of China money buying up single family homes, but China has been putting steady pressure on all that trying to plug those foreign exchange leaks, so if anything that's waning.

Where's the money for the stock market coming from? It used to be quantatative easing and FED reserve bond buying. I guess the yen carry trade in part and probably lately tax cuts a bit. It's harder to see where the money is coming from in the stock market though because buyers are largely anonymous.

[1].http://www.calculatedriskblog.com/2018/02/new-home-sales-dec...

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