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Asset Bulge (in finance)


What does Asset Bulge (in finance) mean?

Bulge, a word similar to bubble, is used to indicate an abnormal increase in price of an asset class. The price increases and demand increases in anticipation of further price-increase in near term. Everybody wants to buy as quickly as possible. This further jacks up asset value artificially. Like bubble in real life, bulge cannot sustain for long. It is short-lived. And suddenly the bubble bursts and price falls drastically, putting investors to a big loss.

Futures Knowledge Explains Asset Bulge (in finance)

The U.S. subprime mortgage crisis is a recent example of bulge. The housing prices had reached at an unsustainable level in 2005 & 2006. The housing price collapsed and its spill over effect put the US economy in recession.



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