Bubble-hunting has become more art than science
With the usual gauges of frothiness out of action, behavioural signals are all investors have
UPON BEING sucked into investing during the South Sea Bubble, Sir Isaac Newton reflected that he could “calculate the motions of the heavenly bodies but not the madness of people”. From tulip mania in 17th-century Amsterdam to railway fever in Victorian Britain, history is littered with tales of investors who lost their heads shortly before they lost their shirts, in the grip of mass delusions described by Alan Greenspan, a former chairman of the Federal Reserve, as “irrational exuberance”.
This article appeared in the Finance & economics section of the print edition under the headline “Foam party”
Finance & economics August 22nd 2020
From the August 22nd 2020 edition
Discover stories from this section and more in the list of contents
Explore the editionMore from Finance & economics
The stockmarket rout may not be over
As investors pause for breath, we assess what could turn a correction into a crash
Why Japanese stocks are on a rollercoaster ride
Volatility in global markets continues
Why Japanese markets have plummeted
The global rout continues, with the Topix experiencing its worst day since 1987
Swing-state economies are doing just fine
They would be doing even better if the Biden-Harris administration had been more cynical
Can Kamala Harris win on the economy?
A visit to a crucial swing state reveals the problems she will face
Why fear is sweeping markets everywhere
American and Japanese indices have taken a battering. So have banks and gold