Received: by alpheratz.cpm.aca.mmu.ac.uk id CAA27562 (8.6.9/5.3[ref pg@gmsl.co.uk] for cpm.aca.mmu.ac.uk from fmb-majordomo@mmu.ac.uk); Mon, 25 Feb 2002 02:24:12 GMT From: <AaronLynch@aol.com> Message-ID: <197.2ccab9b.29aaf904@aol.com> Date: Sun, 24 Feb 2002 21:18:44 EST Subject: Re: Two financial thought contagion papers now online To: memetics@mmu.ac.uk Content-Type: text/plain; charset="US-ASCII" Content-Transfer-Encoding: 7bit X-Mailer: AOL 4.0 for Windows 95 sub 113 Sender: fmb-majordomo@mmu.ac.uk Precedence: bulk Reply-To: memetics@mmu.ac.uk
In a message dated 2/22/2002 6:33:55 PM Central Standard Time, Grant
Callaghan <grantc4@hotmail.com> writes:
> I remember that even the authoritarian advice of Alan Greenspan about
> "irrational exuberance" was laughed at not long before the bubble burst.
> Someone even wrote a book making fun of his catch phrase. A few months
> later, it wasnt' funny anymore. But logic says the stock market only does
> two things: it goes up and it goes down -- sequentially. It's a
> self-correcting mechanism that always over-corrects before it stabilizes.
> The past history of the market demonstrates this trend over and over
during
> the past hundred years. But irrational exuberance is stronger than data
and
>
> that hope that beats eternal within the human breast takes on religious
> overtones of belief in the ponzi scheme of an over-subscribed market. The
> most common term for it is "The Greater Fool" theory. This implies that
one
>
> can always find a greater fool to sell inflated stocks to. Sounds a lot
> alike the mantra of the lottery ticket buyer: "You can't win if you don't
> buy a ticket."
>
> Grant
Hi Grant.
Actually, the book Irrational Exuberance is a serious and very well
done book, not meant as a joke. I think that some media people may
have joked about it, though. It has a chapter on contagions, too.
Also, Alan Greenspan started referring to "the contagion effect"
in reference to the Asian economic crisis in 1997.
--Aaron Lynch
Shiller, R. (2000) Irrational Exuberance. Princeton:
Princeton University Press.
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