Posted on 07/25/2002 5:19:44 AM PDT by SJackson
Edited on 04/22/2004 11:46:49 PM PDT by Jim Robinson. [history]
LEXINGTON, Mass. -- In a well-manicured Boston retirement community, Charles P. Kindleberger has watched the stock-market turmoil unfold during the past two years with a sense that he has seen it all before.
Mr. Kindleberger, a retired economist, wrote the 1978 economics classic "Manias, Panics, and Crashes: A History of Financial Crises." The book, required reading for many Wall Street trainees and students of economic history, documents four centuries of boom-and-bust financial cycles. It ranges from a fleeting bubble in the market for Dutch tulips in 1636, to rampant speculation and subsequent collapses in railroad shares in 1847 and 1857, to the Depression in the 1930s, to the rise and fall of Japan's property market in the late 1980s and early 1990s.
(Excerpt) Read more at online.wsj.com ...
I feel so much better.
So if this guy's so good, and everyone reads his book, why was everyone caught by surprise?
Sounds much like what Penn Square Bank was doing except on a much larger scale. The housing bubble should burst within the next year and then . . . I don't even want to think about it.
Richard W.
Not everyone was. Especially since the Nasdaq peaked over two years ago.
There's nothing for Mr. Kindleberger to gloat about. You didn't need an MIT economics professor to tell you that technology stocks were overpriced.
Re Finance at 5.8?
Not everyone was. Unfortunately, almost everyone, including most of everyone on FreeRepublic, was caught in the height of greed and stock market euphoria. There were people here two years ago who said the stock market bubble was waiting to collapse. They were dismissed as lunatics or doom-and-gloomers. Last year when I said that the insane reliance on derivatives and massive credit expansion was going to come back and bite us, there was maybe one or two posts in support.
Read this man's book. It is a accurate potrayal of booms, busts, and market pyschology.
The median house price today in the CA County I live in (Marin) is nearly $700,000!
This is all going to come to a bad end.
The median house price today in the CA County I live in (Marin) is nearly $700,000! This is all going to come to a bad end.
California home prices are excessive, I don't think anybody can deny that. But how widespread is this phenomenon? Homes aren't nearly as costly as that here in Wisconsin (but then, where besides CA *are* they that costly). While I consider the market 'somewhat expensive,' a three bedroom, two story home in the Milwaukee 'burbs for around $180,000 is a far cry from $300-700k! Yes, income levels for comparable professions are lower here too, but that's a huge gap. And things are cheaper, the further you go from a city.
Anybody else care to summarize their local markets? Do any of you have a favorite website on the subject of countrywide home price analysis?
Are you kidding? There are still people here posting that they are buying stocks. They have been calling a market bottom for over a year. Now, they are seeing their money evalopate and are angry.
The same will happen with housing. When the bottom falls out, they'll get clipped again.
Richard W.
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