Re: Two financial thought contagion papers now online

From: AaronLynch@aol.com
Date: Mon Feb 25 2002 - 04:22:09 GMT

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    From: <AaronLynch@aol.com>
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    Date: Sun, 24 Feb 2002 23:22:09 EST
    Subject: Re: Two financial thought contagion papers now online
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    In a message dated 2/24/2002 9:42:22 PM Central Standard Time,
    ecphoric@hotmail.com writes:

    > Subj: Re: Two financial thought contagion papers now online
    > Date: 2/24/2002 9:42:22 PM Central Standard Time
    > From: ecphoric@hotmail.com (Scott Chase)
    > Sender: fmb-majordomo@mmu.ac.uk
    > Reply-to: memetics@mmu.ac.uk
    > To: memetics@mmu.ac.uk
    >
    >
    >
    >
    >
    > >From: <AaronLynch@aol.com>
    > >Reply-To: memetics@mmu.ac.uk
    > >To: memetics@mmu.ac.uk
    > >Subject: Re: Two financial thought contagion papers now online
    > >Date: Sun, 24 Feb 2002 21:18:44 EST
    > >
    > >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.
    > >
    > >
    > Is that the same Alan Greenspan who wrote the essays "Antitrust", "Gold
    and
    > Economic Freedom", and "The Assault on Integrity" which were published in
    > Ayn Rand's _Capitalism: the Unknown Ideal_? What's he up to these days ;-)

    I think he was named Chieftain of the Joint Chairs of Staff, or
    something. Maybe I should take a course in Greenspanology and
    go read those essays!

    --Aaron Lynch

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