Sunday, April 27, 2008
Hard landing after hedge fund “mass heist “
Herd-like behaviour among investors is not simply explained by stupidity. Most asset bubbles are fairly obvious phenomena, even while they are still inflating, yet despite the fact that everyone knows they must eventually deflate, they remain strangely seductive. Nor is this apparent willingness irrationally to ignore the dangers explained entirely by greed: you know it's a bubble, you know it will eventually end, but hey, prices could double again before gravity takes hold.