the_unlettered_tellurian

I just made a futile attempt at reading How a bubble stayed under the radar published on March 2, 2008 in the New York Times…very boring…

One great puzzle about the recent housing bubble is why even most experts didn’t recognize the bubble as it was forming.

This is not true. There were ample voices talking about the bubble. Just that enough people were not ready to examine the problem back then. Apparently a few hedge fund managers who understood it (Peter Thiel??) made a lot of money betting against the bubble too.

“I’d come to realize that we’d never be able to identify irrational exuberance with certainty, much less act on it, until after the fact.”

Excellent!!! If this is what the great Alan Greenspan has to say, we at least now know we don’t need “serious students of the markets” to hold such “responsible” positions. We just need someone who can communicate the problem “after” it has happened…err…sorry…make that “before”

If people do not see any risk, and see only the prospect of outsized investment returns, they will pursue those returns with disregard for the risks.

Now, that is something worth believing…we will continue investing in any future bubble (just like we did this time) until our dear business reporters decide to finally write a story on it. Unfortunately, all this writing happened way too late.

We have so many theories that explain the bubbles – information cascades, mimetic desire, bigger fool theory – we have enough of these. what seems to be clearly lacking is our ability to use these to control the bubble.

This is so boring…isn’t there anything better to write about “bubbles”, especially when the author’s credentials indicate he is a very enlightened being!

This New York Times graphic gives an unique perspective on the percentage of income spent by Americans on fuel across various counties.

Titled The Varying Impact of Gas Prices it says that the counties where motorists spend the highest percentage of their income on gasoline tend to be in poor, rural areas.