Economy Now Facing the Biggest Bubble Since Housing?

After the housing bubble and the Internet bubble before that, you'd think we'd learn our lesson. But maybe not.

According to Citigroup economist Steven Wieting health care is the next big bubble looming in the distance.

And to make matters all the more worrisome, his analysis suggests it’s like nothing we’ve seen before.

“It’s not a single asset price that’s about to pop (like housing) and it doesn’t have a cyclical component,” he explains during a live interview on Fast Money.

Rather, “It’s a fundamental bubble that will have a large impact on the economy.”

Wieting says the trouble is spiraling health care costs that are growing at a fast and furious pace, a pace that will become all but impossible to support.

“Ultimately there will be a price to pay” he says.

With the lion’s share of health care costs shouldered by companies and governments, he thinks the rising costs will ultimately hit budgets.

“We’ll either have to raise taxes or increase budget deficits in order to finance it. And it will crowd out other things. Already we're starting to see it impact education and infrastructure spending."

Going forward, Wieting tells us areas in health care that will be hardest hit are areas that operate at high margins. Those companies will probably see their margins squeezed.

Although he’s not a stock picker, the Fast Money traders are.

And Jon Najarian extrapolates that thesis to mean that if there are health care products that people can do without – they may have to do without.

“This kind of thesis doesn’t bode well for medical device makers such as Intuitive Surgical the maker of daVinci. And it’s probably negative for implant makers like Stryker ,” he says.

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Trader disclosure: On Apr 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Keith Mccullough is long GLD; Keith Mccullough is long XLU; Keith Mccullough is long XLF; Mike Murphy is long AKS; Mike Murphy is long MS; Mike Murphy is long INTC; Mike Murphy is long ANF; Mike Murphy is long FCX; Mike Murphy is long PHM; Karen Finerman is long AAPL; Karen Finerman is short AAPL CALLS; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Jon Najarian is long call spreads in AAPL; Jon Najarian is long call spreads in JPM; Jon Najarian is long call spreads in GDX; Jon Najarian is long call spreads in XLF; Jon Najarian is long call spreads in INTC; Jon Najarian is long call spreads in IBM; Jon Najarian is long call spreads in HFC; Jon Najarian is long call spreads in WNR; Jon Najarian is long call spreads in SBUX; Jon Najarian is long call spreads in FCX; Jon Najarian is long SD SEP 8 CALLS; Jon Najarian is long call spreads in UPS; Jon Najarian is long CIGX; Jon Najarian is long CME; Jon Najarian is long CBOE

Colin Gillis
Nothing to disclose

Steven Wieting
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues. with wires.