After all that has happened these past few years with respect to the global recession, pundits everywhere are concerned with predicting when, where and how the next subprime-like “bubble” will occur. Speculation runs rampant, as analysts who adhere to determinist principles assume they can accurately predict the next iteration/s of such an economic bubble.  Two interesting examples of sectors where some analysts see warning signs are listed below:

1) Microfinance in India Lending to the poor has proven so profitable in India that microfinance institutions saw their loan portfolio jump from $252 million to $2.5 billion in two years, raising fears of a subprime-like microfinance bubble. Critics say that the expansion has been too large, too fast, and too geographically concentrated – pointing to incidents of mass default in pockets of the country.With an estimated 400 million people lacking access to formal banking services, India is considered one of the world’s largest microfinance markets.

2) Higher Education in the U.S. The Senate Health, Education, Labor and Pensions Committee has initiated a new investigation into federal investment in higher education. Congress last instituted reforms in the for-profit education sector two decades ago, but federal aid to students at for-profit schools has rapidly increased, approaching $24 billion last year – with an additional $36 billion Pell Grant boost approved in March. A report released recently by chairman Senator Tom Harkin found that up to 90% of for-profit schools’ revenue comes from Washington and that for-profit students are graduating with more debt than students at public or private nonprofit universities. With 96% of proprietary students taking out loans, and nearly half of them defaulting, taxpayers foot the bill. At current increasing enrollment and loan rates, there could be $330 billion in defaults in the coming decade. According to some analysts, government money, lightly supervised institutions, unchecked supervising bodies and debt-trapped students all sound similar to the subprime-mortgage collapse.

Are these analysts shrewdly observing the makings of future bubbles, or are they serving more as alarmists who capitalize on today’s climate of fear among the general public? Whatever the answer, we are undoubtedly going to see increasing speculation, and consequently — more industries/sectors coming under fire from global regulatory bodies.