Re: Two financial thought contagion papers now online

From: Scott Chase (ecphoric@hotmail.com)
Date: Mon Feb 25 2002 - 17:51:25 GMT

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    From: "Scott Chase" <ecphoric@hotmail.com>
    To: memetics@mmu.ac.uk
    Subject: Re: Two financial thought contagion papers now online
    Date: Mon, 25 Feb 2002 12:51:25 -0500
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    >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 23:22:09 EST
    >
    >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!
    >
    >
    http://www.federalreserve.gov/bios/greenspan.htm

    He's the big cheese of the Federal Reserve. In other words, if he wakes up
    with a headache, the stock market drops a couple points.

    The psychobiographical tie-in with Objectivism and Rand is worth a deeper
    look for those so inclined, though I'm not sure how committed Greenspan is
    or was to Rand's philosophy.

    I'd assume Objectivism has had a reasonable degree of propagation within
    American culture as a sort of neo-classical form of laissez-faire liberalism
    combined with Apollonian (versus Dionysian) egoism and naive realism (the
    sort that casually side-steps Hume's problems and demonizes Kant).

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