Wednesday, April 16, 2008

But everything is OK. Really. Dubya says so.

The next bubble: Priming the markets for tomorrow's big crash

1. I will use the familiar term “bubble” as a shorthand, but note that it confuses cause with effect. A better, if ungainly, descriptor would be “asset-price hyperinflation”—the huge spike in asset prices that results from a perverse self-reinforcing belief system, a fog that clouds the judgment of all but the most aware participants in the market. Asset hyperinflation starts at a certain stage of market development under just the right conditions. The bubble is the result of that financial madness, seen only when the fog rolls away.

Posted by lvmreader @ 04:24 PM (725 views)
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5 thoughts on “But everything is OK. Really. Dubya says so.

  • Are you posting it as much as he keeps saying it? :-).

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  • Yup, but don’t worry, I’ll be back to

    Dorothy, Kansas, Bye Bye

    soon enough

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  • japanese uncle says:

    Don’t worry. All Dubya can see is what’s happening within 10 yards radius of him. He can recall what happened maximum a week ago. Any abstract concept is beyond him, but he can certainly understand ‘cold’ ‘hot’ ‘red’ ‘blue’ ‘bright’ ‘dark’, and the like. Well done Dubya! Good show!

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  • Good article but it has been posted here before.

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  • Micasesucasa says:

    A very interesting article with some good history on bubbles and economics – worth a read!

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