3 Ingredients of Market Bubbles
"Innovation, speculation, and delusion have come together in bubble after bubble", says Financial Analysts Journal editor Rodney Sullivan. March 7, 2011 Text Version or Morningstar Video (7:19min):
My note: with respect to Canadian real estate we have a long history of central government risk suppression policies (via CMHC and the BoC) as prime manufacturer's of "innovation", and we have the resulting unbridled "speculation" via leverage (debt) as prices rise, and we have mass delusion in the form of the greater fool who will come along and pay an even higher price. BR
History, Charts & Curated Readings
"History, real solemn history, I cannot be interested in.... I read it a little as a duty; but it tells me nothing that does not either vex or weary me. The quarrels of popes and kings, with wars and pestilences in every page; the men all so good for nothing, and hardly any women at all - it is very tiresome." Jane Austen spoken by Catherine Morland in 'Northanger Abbey'
"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement; and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." George Santayana Vol. I, Reason in Common Sense