NEW YORK CITY—Many would agree that we are once again in bubbleterritory in the pricing levels of financial assets. In spiteof a thorough absence of economic vibrancy and extreme levels ofgeopolitical instability that at the least drain resources thatcould otherwise be invested in economically productive endeavors,pricing of financial assets are at or near historical highs. Thequestions that are on many people's minds today include: Howlong can this go on for? What could cause the bubble to pop? Howcan I protect myself when it does?

For most of the past 4 years I have heard predictions of animminent interest rate increase. I recall sitting on a panelat a CBRE Investors conference around 2010 or 2011 while I was asenior member of their executive team, and in response to aquestion about rates I said that I believed that there was a greatchance of rates declining than increasing in that next year.

There were murmurs of surprise, and probably some snickers toothinking that it was so obvious that I was wrong. Just acouple of weeks ago someone very close to me who owns a fairlysizeable portfolio of well located commercial real estate told mehe was selling everything. How, I responded, could anyonerightly disagree with that plan given that he would be gettingall-time record pricing for his assets? However, I pointedout, I think that there may be a greater chance that his 4 capassets move towards a 2 cap in the coming years than towards a 6cap.