There are two parts of the bubble process. First there is a big bull market driven by fundamental and psychological factors. At some point the appreciation goes on for long enough and far enough that all people who try to trade it on fundamentals capitulate. Everyone’s expectations are then driven only by the price pattern. That behavior becomes completely extrapolative. And through several mechanisms that extrapolative behavior becomes non linear.Macro Bits
Bubble Trouble?
Marshall Auerback
No comments:
Post a Comment