Last Updated Sep 2, 2008 4:12 PM EDT
Just as an influx of money from Asia, the Middle East and Russia was partly to blame for fuelling the irrational boom in the UK property market, so might emerging market exuberance be responsible for a boom-bust scenario in the increasingly overhyped player transfer market.
As with property, players' transfer fees are being driven up by competitiveness unchecked by financial limits. When prices skyrocket, so, too, does risk -- boom is followed by bust.
The most recent transactions are proof of inflated player valuations. The trading window nearly closed on his very expensive boot before it was revealed that Bulgarian Dimitar Berbatov cost Manchester United Â£30.75m. Traditional big-spender Man U has now shelled out Â£114.95m for Berbatov, Wayne Rooney (Â£27m), Rio Ferdinand (Â£29.1m) and Juan Sebastian Veron (Â£28.1m).
Meanwhile, Manchester City's new owner, the Abu Dhabi United Group (ADUG) gazumped Chelsea and set a new record, paying Â£32.5m for Brazilian player Robinho.
This is just the beginning. Investors led by Dr Sulaiman Al-Fahim are likely to throw money at Man City in the hope of doing for the club what Russia's Roman Abramovich has done for Chelsea (that is, spend upwards of Â£570m in five years). Predictions are that this will spark a game of one-upmanship between the billionaire business tycoons. ADUG's already raised the bar considerably with a claim that it will bid Â£135m to lure Cristiano Ronaldo away from United.
This irrational over-spending is something of an own-goal for the clubs' traditional profitability models. Yet it persists. The problem is that clubs such as Arsenal, which won't partake in high-priced player speculation, could lose their best to big spenders. It's the same demand spiral that has sent CEO rewards through the roof in some industries.
The power now resides with the players -- and their loyalty is often to themselves. But if Peston's right, the bubble will eventually burst -- after all, who can sustain a Â£130m-a-player market?
Where it differs from the credit crisis? Underperforming assets are more quickly exposed -- although whether overpriced players or business leaders last longer is open to debate.