Agree mostly although I will say that no one realizes they are in a bubble when they are in a bubble. We were in a bubble in 1999. The Fed and Bush re-inflated the bubble by 2007. At the time, it looked like a normal economic expansion from 2001. With 20/20 hindsight, we can say it was a bubble.
Of this I am sure, we are now running deficits now that are going to crush our country’s future. Hopefully it will be a slow decline although there is every reason to think it won’t be. We have about two to five years before we become the latest chapter in this book, “This Time is Different” (A 121 page pdf, http://www.nber.org/~wbuiter/cr1.pdf . We don’t have a Germany to pay our bills like Greece does.
The Tech Bubble of 2001 was obvious and known to exist since at least 1996.
The Housing Bubble was obvious by 1997, since the Tech Bubble helped fuel easy money and it was also well known that mortgage lenders simply stopped asking questions and just pushed through paperwork. I was surprised it took so long to pop. I thought for sure it was a goner in 2005.