The most recent issue of Harpers magazine has a cover article by Eric Janszen titled The next bubble: Priming the markets for tomorrow’s big crash. He discusses how banks helped create the housing bubble and how subprime loans were only a symptom of the problem: hyperinflation of real estate. He also hypothesized that the markets may still have a few years of correction in them before housing prices are where they belong. The article also predicts alternative energy to be at the center of the next bubble.

On Tuesday, in a suprise event after a couple shaky days in worldwide stock markets, the Federal Reserve lowered interest rates 3/4 of a percent to 3.5%. Paul Kedrosky has reported that many people are already refinancing, but another rate cut may come at the next Fed meeting, which could drive rates lower. Reuters reports

Implied prospects for the Federal Open Market Committee to lower benchmark lending rates by 50 basis points next week FFG8, to 3 percent, fell to 36 percent early on Friday before roaring back to end the week at 70 percent.