5 Investing Bubbles
Didier Sornette, who studies bubbles and is a professor at the Swiss Federal Institute of Technology, says low-interest-rate, low-return environments, where everyone is looking for safe havens (sound familiar?), are perfect for new investment manias.
I went into this article expecting to get in a good sarcastic heckle or two.
No such luck. I actually agree it. Go figure.
I've read it twice so far. Although I agree with all of the verdicts, I can cough up one minor bit of sarcasm.
ReplyDeleteEconomists warn that growth will slow when it reaches 90% of GDP.
Economists do such a fantastic job of warning us of slowing growth!
Stag,
ReplyDeleteMainstream eCONomists are paid to lie! Those that don't lie don't get a seat at the table (a job in academia or the financial industry).
One thing I'm continually told from many hyperinflationists and/or gold bugs is that food prices are going WAY up.
ReplyDeleteI do look at food prices. I track every penny. I'm just not seeing what they seem to be seeing.
Food price inflation lowest since 1992: USDA
WASHINGTON (Reuters) - U.S. food prices are forecast to rise at their lowest rate since 1992, the Agriculture Department said on Wednesday, showing the recent surge in agriculture prices for everything from hogs to wheat so far has not had an impact at the dinner table.
I bought spaghetti the last time I was at Costco. It was CHEAPER than it was when I first started hoarding it a few years ago. No joke.
It was $8.99 for 8 pounds. As of August 6, 2010 it was $8.49 for 8 pounds.
Here's the top ingredient: durum wheat semolina
Wheat goes up, wheat comes down. The world goes on.
I've been able to buy spaghetti at $1 per pound, on sale, throughout all of my adult life. The Costco pricing isn't actually the best. I just happen to prefer the brand.
Decision Time Looms for Wheat Farmers
The world's farmers must choose with incomplete information about forces that could drive future price swings. Wheat stocks are high, but it isn't clear if key nations will share the bounty. Moreover, if Russia's drought eases by fall, it could produce a strong crop next year, which could turn fears of a shortage into a sudden glut.
mab,
ReplyDeleteWe live in a crazy world.
Somebody is using Underpants Gnome economics.
1. Wheat stocks are high.
2. ?
3. Higher wheat prices!
Gnomes (South Park)
Phase 1: Collect Underpants
Phase 2: ?
Phase 3: Profit
Phase 1: Collect Underpants
ReplyDeletePhase 2: ?
Phase 3: Profit
That's an almost flawless business model. With the help of the Fed & CONgress, banks have eliminated the flaw.
Phase 1: N/A
Phase 2: N/A
Phase 3: Profit!!!!!!
Good Grief! My word verification is "squat". That's what's left after Wall Street performs its handiwork.
Hahaha!
ReplyDeletePhase 1: Mark to Market
Phase 2: Mark to Model
Phase 3: Profit!!!!!!
Phase 4: Collect Underpayments
Phase 5: ?
Phase 6: Bailout!!!!!
Phase 7: Restart at Phase 2.
More and more land coming on-line - even in Africa now.
ReplyDeleteMore and more capital racing around the globe trying to find return - making any deal interesting.
More and more technology that can hook up smart people from all over the world in seconds.
More and more economies of scales created ala Costco.
Coba
Coba,
ReplyDeleteMore and more budget deficits.
More and more trade deficits.
More and more uncertainty.
Sigh.
Sounds like a world of plenty!
ReplyDeleteSounds like a world of plenty!
ReplyDeleteMy latest post is up. I forgot one.
More bubbles!
my apologies, i really appreciate and enjoy all you do (i stumbled upon you from moma's site...though don't blame her...i dig her too!)...lol
ReplyDeletei am very sorry that this is my first comment here....i will try to add value going forward...honest, but i can't not respond to this...
... this makes my blood boil...
so, bah-ack-pffft-pfffft!
i appreciate you pointing this out and i agree with you (though now i think for a trade, a very large one!... we should reverse!)...because honestly, who cares what some boot lick writing for a worthless news weekly thinks are the bubbles...i want to know what Didier Sornette thinks are the bubbles (he's at least posted his formula for them before). as i said, i may agree wholeheartedly with you but i could care less about some worthless lick-spittle reporter and his even more worthless magazine who can't even report what the protagonist of the story thinks are the bubbles! who cares what Fortune thinks? gah! they're useless, unless there's an article written by one of buffet's (wink-wink especially friendly) note takers, they're pretty much a waste of lip-gloss and rain-forest!... and even those articles are only useful for their deconstruction and deciphering of their false information...
i apologize for ranting on your page, i really do appreciate and enjoy all you do...(you had me at stimulus physics!)... thank you again...and i hope someday i can return the blogging favor!
sincerely, you're #1 fan (alright, i came here late, but i have to be in the top 1000!)
Anonymous,
ReplyDeleteHahaha! Very amusing.
Like I said...
I went into this article expecting to get in a good sarcastic heckle or two.
It was extremely frustrating and very unsatisfying, lol. ;)
Now I am really bummed by the way.
ReplyDeleteI really should have come at it from your angle. I lost a great opportunity! Bah!
http://www.independent.co.uk/news/science/genome-breakthrough-heralds-new-dawn-for-agriculture-2063308.html
ReplyDeletedearieme,
ReplyDelete"Sequencing the human genome took 15 years to complete, but with huge advances in DNA technology, the wheat genome took only a year," Professor Hall said. "The information we have collected will be invaluable in tackling the problem of global food shortage."
Thanks for sharing that! Fascinating.