Krugman on bubblenomics:

Consider the stock bubble of the late 1990s. It was crazy, and when it popped U.S. households suffered a capital loss of about $5 trillion. This was bad, and helped cause a recession. But it never rose to the level of economic catastrophe.

Then came the housing bubble, after which households suffered a capital loss of about $8 billion. Yes, they also suffered a big loss as stocks plunged -- but that was because the housing bust, unlike the stock bust, had a huge impact on the financial system and the economy as a whole.
What was the difference? First, a lot of financial institutions -- which are highly leveraged -- were holding securities whose value was highly sensitive to the state of the housing market. There was nothing comparable in the case of stocks. So the housing bust undermined the financial system in a way the stock bust never did.

Second, households also leveraged themselves up in the housing boom, in a way they for the most part didn’t with stocks (yes, there were people buying dotcoms on margin, but they were not typical). So the housing bust created a balance-sheet crisis for the household sector in a way that the dotcom bust didn’t.

The moral for right now is that even if you believe that there are bubbles inflating or about to inflate, they’re only a big concern if they are leading to leveraged positions for key players. The alleged carry trade bubble sorta kinda mighta have met that criterion, although I never found the warnings all that persuasive. But other stuff -- bubbles in BRIC equities, or gold, or whatever, don’t make the grade.

Anyway, my point is not so much about current events as a more general observation: the bubbles we should fear are those that lead to leverage, and set us up for a Minsky moment.

So he's revising what he had said about the carry trade bubble? I don't understand this stuff completely but I would bet against there being a bond bubble. Krugman seems to think it's in the realm of possibility.

I do remember Long Term Capital Management being over-leveraged in 1998.  At that time the Fed didn't bail them out but instead got all of their creditors to join together and "foam the runway."