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Not Yet a Bubble Economy, but the Makings Are There

Bryan Taylor, president and founder of Global Financial Data, told CNBC’s “Morning Call” that the world economy doesn’t appear to be a bubble that’s about to burst.

He said a market contraction is typically defined as a 10% pullback and a bear market is a 20% decline. U.S. stocks fell about 75% in the early 1930s, the basic definition of a bubble bursting.

“I see that as unlikely,” Taylor said Monday.

But Barry Ritholtz, chief market strategist at Ritholtz Research & Analytics, said the makings of a worldwide bubble economy are in place.

“If you look what’s been going on in Asia and now Europe, the fundamentals are very, very good,” he said. “The combination of easy money, a lot of leverage and good fundamentals lead to a point where risk premiums just shrink and the animal spirits are unleashed.”