If Chinese stock bubble bursts, fallout will be global

It will be interesting to see just how far-reaching the inevitable tumble the Shanghai Composite takes will be. Last February we saw a decline in other international markets after a 9% drop and then a recovery. This time the drop and recovery may not be as friendly.

NEW YORK -- Nobody likes not being invited to a party. That's why investors often choose to ignore warnings that their stock buying is getting out of hand.

Alan Greenspan famously tried to cool things down in 1996 by questioning whether "irrational exuberance" had gripped stock buyers in the United States. It didn't work: Prices would continue to climb for more than three years before plunging into a prolonged downturn.

Now Chinese securities regulators are hoping to knock some sense into investors there. So much money is pouring into stocks that the benchmark Shanghai Composite Index has more than doubled in the last year to a record high.

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