I think you’re right, but that just highlights where the metaphor isn’t perfect, because financial market bubbles do in fact transition from not-burst to burst, sometimes slowly over the course of months. Often it’s not clear when the bursting began until we’re pretty deep into it, and it’s rarely clear when it’s over until quite a while after it’s ended.
It must be 1926. We have a prosperous decade leading up to a market inflated by stock market speculation, stock prices that are unlikely to match anticipated future earnings, the fed increasing interest rates to curb spending which is impacting construction investment, the overproduction of certain commodities, reduction in foreign trade and lending, and retaliatory tariffs and protectionist policies going into effect.
Oh wait, it’s 100 years later and it just rhymes with the lead up to the Great Depression? Cool.
I’m afraid I don’t understand, is bursting not just the transition between not-burst and burst?
What they want to say is that often there is no transition, as in a flash crash.
I think you’re right, but that just highlights where the metaphor isn’t perfect, because financial market bubbles do in fact transition from not-burst to burst, sometimes slowly over the course of months. Often it’s not clear when the bursting began until we’re pretty deep into it, and it’s rarely clear when it’s over until quite a while after it’s ended.
Ah, like a once-in-a-century financial event… Say, when’s the last time we had one of those?
I seem to recall a very large financial bubble associated with a period of time called the “twenties.” Something about “roaring.”
On another topic entirely, remind me which decade we’re in now, please?
It must be 1926. We have a prosperous decade leading up to a market inflated by stock market speculation, stock prices that are unlikely to match anticipated future earnings, the fed increasing interest rates to curb spending which is impacting construction investment, the overproduction of certain commodities, reduction in foreign trade and lending, and retaliatory tariffs and protectionist policies going into effect.
Oh wait, it’s 100 years later and it just rhymes with the lead up to the Great Depression? Cool.
You left out the retail investors thinking margin is a great way to amplify gains with no real risk…