Excellent Saturday long read:
Manias and Mimesis: Applying René Girard to Financial Bubbles
by @byrneseyeview and @TobiasAHuberhttps://www.scribd.com/document/420334402/Manias-and-Mimesis-Applying-Rene-Girard-to-Financial-Bubbles?source=post_page--------------------------- …
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Wouldn't a better and simpler explanation of financial bubbles be as follows: 1. Bubble asset X is promoted 2. X runs up in price 3. People hear that X has run up in price and others are making money holding it
4. People have an intuitive sense that this behavior usually continues for a little while...until it doesn't but they can make a quick buck in between 5. They buy, they promote 6. X runs up in price further 7. Fear of missing out sets in, others buy
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8. The price gets so extravagant that asset holders begin to realize that the upside from further price appreciation is outweighed by the downside, so they sell 9. Price ceases to rise 10. No more new entrants 11. Price falls further 12. Whole thing goes in reverse.
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I don't think we need Rene Girard, mimetic theory, and an animal sacrifice to explain this.
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