Monday, May 15, 2006

The importance of sentiment and the problems of managing an economy by examination of expectations

Prepare for a sudden swing to pessimism

This article explores the relationship between financial institutions, business and sentiment/expectations. Reality will eventually prevail over expectations but there will be an overshoot into pessimism before equilibrium is achieved. Naturally house prices are immune to the economic laws of sentiment and expectations.

Posted by talking rot @ 01:06 PM (612 views)
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