From da Vinci to bitcoin, know the pop factor

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any number of bubbles in financial assets right now. This seems like a good time to guess which are going to pop first. Here are the candidates:

Bonds: There’s no doubt that bond prices will decline in 2018. But will the bond market bubble — which has been building for more than 10 years — actually blow?

Everyone should already understand that bond prices decline when interest rates rise. If you don’t, here’s why: As interest rates rise to, say, 4 percent, any existing bond that’s paying a 3 percent yield is going to be less attractive to investors.

So anyone who wants to sell that 3 percent bond will have to do so at a discount. The price of that 3 percent bond will have fallen. This happens automatically when rates rise. There is no debating this dynamic.

The Federal Reserve has already said it will raise interest rates in 2018 a few more times. And, short of an absolute collapse in the economy, in- coming Fed Chairman Jerome Powell is likely to follow through with the rate hikes that Chair Janet Yellen has started.

The stock market: Stocks have not been acting in a rational way. In normal times, the stock market is like the tide. There’s a high tide when people make money, but then the water recedes, which is when people take profits.

Stocks have been climbing relentlessly. The S&P 500 index was up about 20 percent last year with very few significant pullbacks.

In hindsight, this wasn’t too hard to explain, although few people would have predicted this kind of gain under President Trump. Trump’s goal, as he said often, was to curb red tape for business, cut taxes and make America great again.

All noble goals. And stock investors who wanted to believe drove prices higher. And higher. And higher.

But there’s an old saying on Wall Street that goes: “Don’t fight the Fed.” The meaning is, if the Federal Reserve is cutting interest rates and being otherwise accommodative, then buy stocks.

Right now, the Fed is starting to be unhelpful. It’s raising interest rates and unwinding its quantitative eas- ing policy that kept the financial system awash in liquidity and kept interest rates lower than low for the past 10 years.

If you believe in the “Don’t fight the Fed” mantra, know that the stock market is going to get slapped in the face in 2018.

Bitcoin: The fact that anyone even has to discuss the fate of this and other so-called cryptocurrencies shows just how crazy the world has become.

Bitcoin — or bitcon — is a confidence game. A scam. It will exist and move higher for as long as extremely wealthy people are willing to prop it up in hopes that suckers remain confident that bitcoin has some value.

But the only real value it has is for people trying to do illegal things and countries like North Korea attempting to evade sanctions.

A bubble? Even discussing this possibility puts bitcoin in the same category as real investments, so I won’t do it. Bitcoin is more like putting a value on a criminal enterprise — it’s worth something until the cops shut it down.

Oil: The price of oil has risen nicely over the past few weeks. Why? Because there is a view that the economy, especially in the US, is doing better and will continue to improve.

Is there a bubble yet? Probably not.

And oil prices probably won’t get too bubbly for a simple reason — fracking. If the price of crude gets high enough, US companies that are looking for oil in shale will crank up production and bring prices back down to reality.

Plus, if the economic revival that some are hoping for suddenly fails, then pop goes whatever bubble oil has blown itself into.

Art: A $450 million painting (the Leonardo da Vinci sold last month)? Please! The market for high-end art is in such a bubble that Whistler would be embarrassed to tell his mother.

How’d prices get this high? Simple. There is so much cash — liquidity — sloshing around the economy thanks to the Fed’s largesse and the stock market’s irrational exuberance that people have to put their excess money somewhere.

Real estate: Different parts of the real estate market should act differently next year.

Any house affected by the tax law changes — meaning, anything that you will need a $1 million mortgage to buy — should have a problem. The same phenomenon goes for any house that comes with more than $10,000 in real estate taxes. Other parts of the housing market should be OK. Commercial real estate? A problem in places like New York City where too many buildings are being constructed. This part of the market will have especially acute problems if the economy softens. In that case, companies will have a natural retrenchment. Commodities: The price of copper has been roaring lately. Most commodities have been climbiing since the middle of the year. Gold has been especially hot lately. All of this smacks of inflation and an economy that’s going to do better. If the economy falters, commodity prices will go down. The dollar: It’s been weak for the same reasons commodities have been strong: inflation. If it turns out that the economy is faking us out again, the dollar will reverse course. I’ll say it again: Bubbles are a lot of fun until they burst. Try to get out in time.