tulip mania

Tulipomania: The Story of the World's Most Coveted Flower & the Extraordinary Passions It Aroused
by Mike Dash
Published 10 Feb 2010

In truth there was no need to concoct elaborate conspiracy theories to account for the excesses of the bulb craze. The greed, inexperience, and shortsightedness of the florists themselves were all that was required to turn tulip trading into tulip mania. It was the last week of April before the Court of Holland finally concluded its review of the tulip mania. Eight weeks had passed since the growers had met at Amsterdam to propose their own solution to the crisis, three months since the collapse of the flower trade throughout the province. Yet when the learned judges of the Court returned their findings to the States, they began by admitting that they still did not fully understand what had caused the bulb craze or why things had gotten so badly out of hand.

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The one significant innovation of the hyacinth craze was the practice of buying shares in particularly valuable bulbs, a practice that does not seem to have occurred during the tulip mania. It must have been a frustrating business, in that the shareholders would have to wait a year or more for their flower to produce offsets before they could expect to receive a single bulb of their own, but it was at least a cheap way of buying into hyacinths; one lengthy Dutch poem, Flora’s Bloemwarande, which described the new trade, mentions a florist named Jan Bolt, who sold a half-share in one of his bulbs to a hesitant customer, with only 10 percent down. There were several reasons why the hyacinth trade never matched the tulip mania in magnitude. To begin with, hyacinths are much more difficult to grow than hardy mountain flowers such as tulips, which limited the number of garden lovers interested in buying them.

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Nevertheless, at least a few private enthusiasts in Haarlem and The Hague seem to have been sufficiently caught up in the hyacinth craze to attempt to grow the flowers themselves for profit, and at its peak there was considerable disapproval for the new craze. Memories of the tulip mania evidently remained vivid, for one enterprising publisher reprinted the three Samenspraecken of Gaergoedt and Waermondt, prefacing the dialogues with the comment that the present-day speculators were just as greedy as their ancestors and just as taken in by tawdry deceits of that wily old whore Flora. Others produced new tracts warning against the excesses of the hyacinth trade. With the awful lessons of the tulip mania so fresh in every mind, it might be said that the most remarkable thing about the new craze was that it occurred at all.

The Long Good Buy: Analysing Cycles in Markets
by Peter Oppenheimer
Published 3 May 2020

It is the sheer scale of the excitement and speculation, as well as price appreciation, which is really the hallmark of all bubbles. The tulip mania of the 1630s, one of the earliest well-documented bubbles, has become synonymous with the idea of a ‘mania’ in financial markets. It is intriguing not only because of the staggering price rises during the bubble period itself, but also because the mania appears to have been based purely on greed and speculation, with no fundamental underpinnings to support it. Although the breadth and impact of the tulip mania has since been questioned (see Thompson 2007) it was, nonetheless, a boom of historic proportions.

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They also found that the magnitude of these bubbles increases with the radicalness of innovations, with their potential to generate indirect network effects and with their public visibility at the time of commercialisation.12 Although it is not obvious that innovation was a trigger in the case of the tulip mania, it could be argued that it was important in the financial bubbles of the South Sea Company in Great Britain and the Mississippi Company in France in 1720. Although these bubbles involved frenzied speculation and price rises in the shares of the companies involved, and may appear no more rational than the tulip mania a century earlier, more recent interpretations have suggested that innovations and new technologies did play a part in their development.

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According to their work, 83%–95% of buyers in 2003 were expecting an annual growth rate for housing prices of about 9%, on average, in the following 10 years, well above long-run averages.3 This chapter touches on the issue of bubbles solely in an attempt to identify repeated patterns, characteristics and behaviours that echo across history. There have been many famous bubbles that have been well documented over a period of more than four centuries. Among the most notable, although by no means the only ones, were the following: 1630s: The tulip mania in Holland 1720: The South Sea bubble, UK, and the Mississippi bubble, France 1790s: The canal mania in UK 1840s: The railway bubble in UK 1873: The railway bubble in the US 1920s: The stock market boom in the US 1980s: The land and stock bubble in Japan 1990s: The technology bubble, global 2007: The housing/banking bubble in the US (and Europe).

Mastering Blockchain: Unlocking the Power of Cryptocurrencies and Smart Contracts
by Lorne Lantz and Daniel Cawrey
Published 8 Dec 2020

Fundamental Cryptocurrency Analysis Monitoring cryptocurrency foundation reports that steer development, user adoption figures, and news about regulatory developments helps with fundamental analysis in the short term. For the long term, two comparisons can be made: are cryptocurrencies Tulip Mania or the internet? The argument references two very different points in the history of financial markets. Tulip Mania or the internet? In the seventeenth century, Holland was in what was called its Golden Age, a time when the country ranked among the best in the world in the sciences, trade, and art. During that time, a speculative rush on tulip bulbs occurred, mainly due to the scarcity and rarity of certain flowers’ colors.

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There were many varieties of tulips available on the market, and in some months their prices appreciated over 1,100%. This created a huge run-up in the market, followed by a total bottoming out that led to gigantic losses for some investors. Figure 6-9 shows the rise and fall of tulip prices during what became known as Tulip Mania. Figure 6-9. Market rise and fall during the Dutch Golden Age’s Tulip Mania In the 1990s, people invested fortunes in seemingly any publicly traded company with “.com” in its name. This investment was fueled by low interest rates, which encouraged people to borrow and spend. Prices went up and up, eventually leading to the so-called dot-com crash, where the bottom fell out of the market and many companies were wiped out (see Figure 6-10).

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Index A ABI (application binary interface), Interacting with a smart contract addressesBitcoin, Public and Private Keys in Cryptocurrency Systemsassociating with an identity, The Evolution of Crypto Laundering generating with public/private keys, Public and Private Keys in Cryptocurrency Systems in UTXO transaction model, The UTXO Model Ethereumfor smart contracts, Deploying a smart contract stealth addresses on Monero, How Monero Works whitelisting, Counterparty Risk adjustable blocksize cap (Bitcoin), The Bitcoin Cash Fork adoption of blockchain, The Future of Blockchain airdrops, disbursement of cryptocurrencies via, Airdrops airgapped computers, Counterparty Risk altchains, Understanding Forks altcoins, Understanding Forks, Altcoins-Counterpartyearlier, sample of, Altcoins Litecoin, Litecoin other, More Altcoin Experiments Amazon Quantum Ledger, Blockchain as a Service analysis, Analysis-Hunting for Bartanalytics services for cryptocurrency blockchains, Analytics fundamental cryptocurrency analysis, Fundamental Cryptocurrency Analysis-Tools for fundamental analysistools for, Tools for fundamental analysis Tullip Mania or the internet, Tulip Mania or the internet? technical cryptocurrency analysis, Technical Cryptocurrency Analysis-Hunting for Bartlooking for Bart pattern, Hunting for Bart Anti-Money Laundering (AML) rules, Banking Risk, Singaporeimplementation in Novi wallet, Novi APIsexchange APIs and trading bots, Exchange APIs and Trading Bots-Market Aggregatorscharacteristics of high-quality API, Exchange APIs and Trading Bots Coinbase Pro and Kraken APIs, Exchange APIs and Trading Bots important API calls, Open Source Trading Tech market aggregators, Market Aggregators open source trading tech, Open Source Trading Tech rate limiting, Rate Limiting REST versus WebSocket, REST Versus WebSocket testing in a sandbox, Testing in a Sandbox application binary interface (ABI), Interacting with a smart contract application-based blockchain transactions, Ether and Gas application-specific integrated circuits (ASICs), Mining Is About IncentivesASIC-resistant Scrypt algorithm, Litecoin deterring use for mining, Altcoins X11 ASIC-resistant proof-of-work, Dash arbitrage, Jurisdiction, Arbitrage, Arbitrage Trading-Float Configuration 3basic, Arbitrage Trading basic mistakes in, Basic Mistakes exchange risk, Exchange Risk involving fiat currency, banking risk, Banking Risk regulatory, Avoiding Scrutiny: Regulatory Arbitrage-Crypto-Based Stablecoins timing and managing float, Timing and Managing Floatfloat configuration 1, Float Configuration 1 float configuration 2, Float Configuration 2 float configuration 3, Float Configuration 3 triangular, Arbitrage Trading arbitrageurs, Arbitrage assets, real-woldB-Money digital currency price based on, B-Money backing digital blockchain cryptocurrencies, Tether enabling representation on Bitcoin, Colored Coins and Tokens problems when represented on blockchain, Tether asymmetric cryptography, Public and Private Keys in Cryptocurrency Systems(see also public/private key cryptography) auditors, third-party, for smart contracts, Fungible and Nonfungible Tokens authentication issues in cryptocurrency losses, Security Fundamentals-Recovery Seed autoliquidation, Derivatives Avalanche consensus mechanism, Avalanche Azure, Blockchain as a Service, Blockchain as a Service B B-Money, B-Money BaaS (Blockchain as a Service), Blockchain as a Service Back, Adam, Hashcash Bahamas, regulatory arbitrage, Bahamas banking risk, Banking Risk banking, blockchain implementations, Banking-JPMorganBanque de France, Banque de France China, China JPMorgan, JPMorgan permissioned ledger uses of blockchain, Banking Royal Mint, The Royal Mint US Federal Reserve, US Federal Reserve Banque de France, Banque de France Bart pattern, Hunting for Bart basic arbitrage, Arbitrage Trading Basic Attention Token (BAT), Web 3.0 Basis, Basis beacon chain, Ethereum Scaling Beam, Mimblewimble, Beam, and Grin bidirectional payment channels, Lightning BIP39 for generating wallet seeds, Recovery Seed bit gold, Bit Gold Bitcoin, The Bitcoin Experiment-Bringing Bitcoin to LifeBitcoin Cash fork, Contentious Hard Forks-The Bitcoin Cash Fork block times, Float Configuration 2 bringing the network to life, Bringing Bitcoin to Life-Adoptionachieving consensus, Achieving Consensus-Generating transactions adoption, Adoption compelling components, Compelling Components early security vulnerability, An Early Vulnerability evolution of, Improving Bitcoin’s Limited Functionality Liquid Network federated sidechain, Sidechains mining difficulty, history of, Block Generation Omni Layer protocol on top of, How Omni Layer works predecessors, Bitcoin Predecessors-Bit Gold proof-of-work consensus, problems with, Ripple and Stellar Satoshi Nakamoto's whitepaper, The Whitepaper scalability issues, solving with Lightning, Lightning SHA-256 hash algorithm, Hashes storing data in chain of blocks, Storing Data in a Chain of Blocks timestamp system to verify transactions, Introducing the Timestamp Server transaction life cycle, Transaction life cycle 2008 financial crisis, The 2008 Financial Crisis why you can't cheat at, Storing Data in a Chain of Blocks bitcoin, Storing Data in a Chain of Blocksevolution of its price, Market Infrastructure futures, Derivatives halving, Whalesimpact on market, Whales Bitcoin Cash (BCH), Contentious Hard Forks-Replay attacks Bitcoin Improvement Proposals (BIPs), Bitcoin Improvement Proposals, Understanding Ethereum Requests for Comment Bitcoin Satoshi’s Vision (SV), The Bitcoin Cash Fork “Bitcoin: A Peer-to-Peer Electronic Cash System”, The Whitepaper Bitfinex, Bitfinex BitGo, Custody BitLicense, FinCEN Guidance and the Beginning of Regulation BitPay, Brokerages Bitstamp, Exchanges blind signature technology, DigiCash block explorers, Block explorers block hashes, Storing Data in a Chain of Blocks, Block Hashes-Custody: Who Holds the Keysvalid, criteria for on Bitcoin, Block discovery block height, Storing Data in a Chain of Blocks block propagators (EOS), Blockchains to Watch block reward, The Coinbase Transaction Block.One, Skirting the Laws blockchain explorers, Analytics Blockchain.com, Analytics, Block explorers, The Evolution of Crypto Laundering blockchainscreating new platforms for the web, Web 3.0 future of, The Future of Blockchain-Summaryblockchains to watch, Blockchains to Watch-Mimblewimble, Beam, and Grin interoperability, Interoperability privacy, Privacy similarities to internet, The More Things Change tokenizing everything, Tokenize Everything illegal uses of, Catch Me If You Can information on the industry, Information oracles interacting with, Important Definitions origins of, Origins of Blockchain Technology-SummaryBitcoin experiment, The Bitcoin Experiment-Storing Data in a Chain of Blocks Bitcoin predecessors, Bitcoin Predecessors-Bit Gold bringing Bitcoin network to life, Bringing Bitcoin to Life-Adoption distributed versus centralized versus decentralized, Distributed Versus Centralized Versus Decentralized-Bitcoin Predecessors electronic systems and trust, Electronic Systems and Trust otherbanking implementations, Banking-JPMorgan Blockchain as a Service (BaaS), Blockchain as a Service databases and ledgers, Databases and Ledgers decentralization versus centralization, Decentralization Versus Centralization enterprise implementations, Enterprise Implementations-DAML Ethereum-based privacy implementations, Ethereum-Based Privacy Implementations key properties of distributed verifiable ledgers, Key Properties of Distributed Verifiable Ledgers Libra, Libra-Summary permissioned ledger uses, Permissioned Ledger Uses-Payments use cases, What Are Blockchains Good For?

A Demon of Our Own Design: Markets, Hedge Funds, and the Perils of Financial Innovation
by Richard Bookstaber
Published 5 Apr 2007

They hardly ever reproduced, and when they did, their offspring often did not share the same flaming characteristics as the mother bulb.3 Paying exorbitant sums for these rare flowers was no more unusual than for the very wealthy today to pay fortunes for a Rembrandt (who, by the way, was painting the rich in Amsterdam in 1637). But even before tulip mania seized Holland—and for decades after the bubble burst—such rare bulbs fetched huge sums. In fact, just one month after the common bulbs that fueled the mania could no longer find a buyer, a quantity of rare bulbs was sold in Haarlem, a center of the tulip mania, for more than 10,000 guilders. Tulip mania came neither from these rare bulbs nor from their collectors. The fervor of the collectors may have been a trigger for the bubble, but it was distinct from the event.

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The reason so many businesses with no apparent prospects for profitability found takers was that the demand they were fulfilling was speculative, not economic. This dynamic is not new. It has been in play in the markets as far back as the classic tulip bubble in seventeenth-century Holland. WHY TULIP MANIA WASN’T CRAZY Many of the stories related to the Dutch tulip mania of the 1630s are apocryphal, drawn for sermons on the bitter fruits of avarice, the fodder for object lessons on prudence and frugality. These stories often tried to bring perspective to the phenomenon by introducing hapless, but arguably more rational, outsiders into the middle of the frenzy.

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Contemporary accounts estimate that in just one Dutch town more than 7 million guilders of tulips were traded, an amount that exceeded the total capitalization of the Dutch East India Company, the largest trading company in Europe at the time. Then, within a few short days in mid-February of the next year, the market simply disappeared. 174 ccc_demon_165-206_ch09.qxd 7/13/07 2:44 PM Page 175 T H E B R AV E N E W W O R L D OF HEDGE FUNDS The explanation for the tulip mania usually centers on the irrationality of the market—the incredible excess in paying unbelievable prices for mere flowers. This misses the point. Botany and horticulture were an avocation for many wealthy Europeans in the seventeenth century. And tulips in Holland were among the most sought-after and valued.

Irrational Exuberance: With a New Preface by the Author
by Robert J. Shiller
Published 15 Feb 2000

If the Nifty Fifty are examples of absurdly overpriced stocks, then it seems that we have failed to make our case that such examples are proof of market irrationality. Peter Garber, in his book Famous First Bubbles, argues that the most famous bubble of all, the seventeenth-century tulip mania in Holland, was not a clear example of irrational mispricing either. The story of the tulip mania, popularized in a book by Charles Mackay in 1841, is so well known today as to be part of our popular culture, and it is widely cited as an example of a speculative bubble. The term refers to a time when prices of tulip bulbs reached what seemed like absurd levels and then crashed.

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By saying that there was much discussion, he is suggesting word-of-mouth effects, but he really does not tell a mania story. 2. The tulip mania, a speculative bubble in the price of tulips in Holland in the 1630s, will be discussed in Chapter 9. There were Dutch newspapers by 1618, and Holland, in contrast to other countries at the time, allowed the printing of domestic news, not just foreign news. On these pioneering Dutch newspapers, see Robert W. Desmond, The Information Process: World News Reporting to the Twentieth Century (Iowa City: University of Iowa Press, 1978). The primary surviving source of information about the tulip mania is a pamphlet published in Holland during its peak.

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Part Two Cultural Factors This page intentionally left blank Four The News Media T he history of speculative bubbles begins roughly with the advent of newspapers.1 One can assume that, although the record of these early newspapers is mostly lost, they regularly reported on the first bubble of any consequence, the Dutch tulip mania of the 1630s.2 Although the news media—newspapers, magazines, and broadcast media, along with their new outlets on the Internet—present themselves as detached observers of market events, they are themselves an integral part of these events. Significant market events generally occur only if there is similar thinking among large groups of people, and the news media are essential vehicles for the spread of ideas.

Why Stock Markets Crash: Critical Events in Complex Financial Systems
by Didier Sornette
Published 18 Nov 2002

This signals the possible existence of a subtle but nonetheless influential worldwide cooperativity at times preceding crashes. HISTORICAL CRASHES In the financial world, risk, reward, and catastrophe come in irregular cycles witnessed by every generation. Greed, hubris, and systemic fluctuations have given us the tulip mania, the South Sea bubble, the land booms in the 1920s and 1980s, the U.S. stock market and great crash in 1929, and the October 1987 crash, to name just a few of the hundreds of ready examples [454]. The Tulip Mania The years of tulip speculation fell within a period of great prosperity in the republic of the Netherlands. Between 1585 and 1650, Amsterdam became the chief commercial emporium, the center of the trade of the northwestern part of Europe, owing to the growing commercial activity in newly discovered America.

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During the build-up of the tulip market, the participants were not making money through the actual process of production. Tulips acted 8 chapter 1 Fig. 1.1. A variety of tulip (the Viceroy) whose bulb was one of the most expensive at the time of the tulip mania in Amsterdam, from The Tulip Book of P. Cos, including weights and prices from the years of speculative tulip mania (1637); Wageningen UR Library, Special Collections. finan cial crashe s : w h a t, w h y, a n d w h e n? 9 as the medium of speculation and their price determined the wealth of participants in the tulip business. It is not clear whether the build-up attracted new investment or new investment fueled the build-up, or both.

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Notwithstanding the probable confusion it may bring to the mind of readers, it seems appropriate to mention here a recent book by P. M. Garber that reexamined the tulip mania and the Law and South Sea bubbles described in chapter 1 with a fresh and close look at the historical record [153]. His main conclusion is that the fabled elements ritually invoked as underlying speculative bubbles with herding and irrational behavior are just not true. Instead, he defends the view that these events have a possible explanation in terms of fundamental valuation. The interesting part is that Garber views the tulip mania “myth” as originating from a rumor that was progressively strengthened by successive authors using it for their own agenda, such as to support moralistic attacks against “excessive speculation” and, in modern times, to plead for government regulation: “the tulipmania episode    is simply a rhetorical device used to put forward an argument that    the existence of positi ve feedback s 111 tulipmania proves that markets are crazy.

The End of the Free Market: Who Wins the War Between States and Corporations?
by Ian Bremmer
Published 12 May 2010

Market failure didn’t begin with the global recession of 2009, the bank failures of 2008, the credit crunch of 2007, the savings-and-loan crisis of the 1980s,3 or even the stock market crash of 1929. Those investing heavily in the South Sea Company in 1720, the victims of irrational exuberance over the firm’s monopoly on trade in the South Seas, might have saved themselves some heartache had they learned the lessons of the Dutch tulip mania of 1637.4 Each successive market meltdown creates a temporary surge of momentum behind government efforts to ensure that it never happens again. That’s why the state’s role in enabling modern capitalism extends well beyond the provision of a social safety net. Even in America, home to many a free-market champion, government is expected to referee the game to ensure that players observe the rules, to serve as lender and guarantor of last resort, and to provide public goods like national defense, a criminal-justice system, public education, environmental protection, health insurance for the elderly and poor, air-traffic control, and disaster relief.

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Profiting from access to markets in Russia, the Persian Gulf, and elsewhere means welcoming investment from these places—even from state-owned companies. Free markets will always move in cycles. Greed will fuel more booms, and fear will drive more busts. Each time a bubble bursts, someone will retell the story of the tulip mania of 1636, the South Sea bubble of 1720, and the dot-com bubble of the 1990s. But markets are not to blame when governments fail to properly regulate them. As Philip Stephens wrote in the Financial Times at the height of the crisis in March 2009, “Prominent among the causes of the financial crash was the failure of politics to keep up with economic integration.

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The shares then fell 90 percent in the remainder of 1720, ending the year at the January price but ruining many latecomers to the market in the process. In the same year, a similar Mississippi Bubble led to the collapse in value of the French-based Louisiana Company shares, which had risen 3,600 percent the year before. These two first stock-based bubbles were preceded nearly a century earlier by the Netherlands’ tulip mania, in which tulip bulbs briefly became a commodity as valuable as gold before the price collapsed in February 1637. All three bubbles were first popularly summarized in Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds (1841; New York: Harmony Books, 1980). 5 The most accessible reference to Wilhelm Liebknecht’s use of this phrase is at http://www.marxists.org/archive/liebknecht-w/1896/08/our-congress.htm. 6 Ludwig von Mises, Socialism: An Economic and Sociological Analysis, trans.

Attack of the 50 Foot Blockchain: Bitcoin, Blockchain, Ethereum & Smart Contracts
by David Gerard
Published 23 Jul 2017

(Though after that crash, at least you had a nice cuddly toy.) The key point is the “mania phase.” Charles Mackay’s superlative Memoirs of Extraordinary Popular Delusions and the Madness of Crowds, first published in 1841, remains an excellent and accessible introduction to economic bubbles and the thinking behind them, starting with the Tulip Mania of 1637 and the South Sea Bubble of 1720.51 Bitcoin is a completely standard example. “Stages in a bubble” by Jean-Paul Rodrigue, 2008.52 Bitcoin prices, January 2012 to January 2015. Totally no resemblance to the above. Data: coindesk.com The first bitcoin was mined in January 2009, but for the first year the enthusiasts just exchanged them amongst themselves for fun.

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Development is substantially sponsored by the US government, both for their own use and to help dissidents in oppressive countries. (Even as the NSA doesn’t like it at all.) Also favoured by Internet trolls and darknet users. Tulip: a pretty flower, and the subject of the 1637 bubble known as “tulip mania,” one of the first well-documented bubbles. Turing complete: when a computer or computer language is sophisticated enough that it can theoretically solve any problem that any other computer can … given enough memory and time. You often don’t want this, because it makes it harder to prove mathematical correctness when you really need to be certain, e.g. in a smart contract.

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Petersburg Bowl 77 Status 95, 98 Stellar 48 Stephenson, Neal 19 streaming 127 Szabo, Nick 19, 32, 59, 101, 102, 105, 107 TAO, The 135 TechUK 115 Telstra 73 Temkin, Max 75 Thiel, Peter 18 Thornburg, Jonathan 23 Tiny Human 129 Today (Radio 4) 67 Todd, Peter 59, 68 Top500 65 Tor 49, 59 Tual, Stephen 109 Tucker, Jeffrey 40 Tulip Mania 35 Tulip Trust 64 Turing completeness 107 Ujo Music 129 UK Government Office for Science 123 Ukash 73 Ulbricht, Lyn 53 Ulbricht, Ross 26, 48, 64 unbanked 29 Underhanded C Contest 106 Underhanded Solidity Coding Contest 106 Venezuela 31 Ver, Roger 17, 37, 44, 47, 48, 50 virtual reality 135 Visa 28, 36 wallet 12 Walpole, Sir Mark 123 WannaCry 73 Washington Post 32 Wells Fargo 87 Western Union 28 Westwood, Adam 64 WhollyHemp 76 WikiLeaks 36, 62 Wikimedia Foundation 76 Wikipedia 76 Wilcke, Jeffrey 94 Willybot 82 Winter Olympics 93 Wired 64 Wise, Josh 93 Wood, Gavin 94 WordPress 75 Wright Family Trust 63 Wright, Craig 61, 139 Yapizon 89 YouTube 137 Zamovskiy, Andrey 120 Zero Hedge 24 Zhoutong 83 Notes [1] Satoshi Nakamoto.

Capitalism: Money, Morals and Markets
by John Plender
Published 27 Jul 2015

The ruling Passion, be it what it will, The ruling Passion conquers Reason still.72 Throughout history there have been periods where asset prices have moved far out of line with economic fundamentals, driven by what Jonathan Swift, in his ballad The Bubble, called ‘the madness of crowds’. These episodes, ranging from the Dutch tulip mania of the seventeenth century to the Mississippi Bubble in eighteenth-century France, were brilliantly chronicled in Memoirs of Extraordinary Popular Delusions by the nineteenth-century journalist Charles Mackay, of which more in a moment.73 If this sounds like a narrow academic debate, it is not.

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But he added that it was impossible to quash a bubble in a democratic society because it would lead to the Fed’s independence being curtailed.76 As for efficient market theorists such as Eugene Fama, they, too, remain unrepentant. How do they justify themselves? Consider this, first, from the perspective of financial history. In an academic paper, the economist Peter Garber has examined three great bubbles in detail: the Dutch tulip mania, in which contract prices for bulbs soared to astronomical heights and then collapsed; the Mississippi Bubble in France, a scheme engineered by the Scottish adventurer John Law which enjoyed a monopoly over French colonial trade and ended in a speculative frenzy fuelled by the issue of paper money; and the South Sea Bubble in England, where speculation hinged on the South Sea Company’s modest trading rights in the West Indies and South America, together with its purchase of the national debt in exchange for an annual payment from the Exchequer.77 On the seventeenth-century tulip euphoria, Garber argues that Charles Mackay failed to discuss what the fundamental price of tulips should have been, pointing out that there is a standard pricing pattern for new varieties of flowers that holds even today.

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Shiller has also produced detailed statistical work on stock prices and dividends going back to 1871, in which he finds that the volatility of prices relative to underlying corporate performance is far more than can be explained by efficient market theory.82 Charles Mackay is interestingly in tune with these insights of behavioural finance, even if he is prone to exaggerate. Writing of the tulip mania, he said: Many individuals grew suddenly rich. A golden bait hung temptingly out before the people, and one after the other, they rushed to the tulip-marts, like flies around a honey pot. Everyone imagined that the passion for tulips would last for ever, and that the wealthy from every part of the world would send to Holland, and pay whatever prices were asked for them.

Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud
by Ben McKenzie and Jacob Silverman
Published 17 Jul 2023

As the price of Bitcoin rose to nearly $70,000 in November, as industry leaders like Michael Saylor exhorted people to “go mortgage your house and buy Bitcoin with it,” I couldn’t believe what I was witnessing. It had the feeling of a generational hallucination that would lead to widespread financial ruin. Tulip mania, the Wall Street Crash of 1929, Albania’s Ponzi-inspired civil war—take your pick. But all day, from Twitter to CNBC to the guy running a nearby postal store, I heard how wrong I was. Economic fundamentals didn’t matter. The proof was in the charts: Number go up. The financial press was practically in lockstep about the inevitable crypto-fied future of money.

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In economics, this is called the greater fool theory. The price of an asset becomes uncorrelated with its actual value, and it ends up only being worth what you can convince the next person, the person more foolish than you, to pay for it. The first speculative bubble in history was also one of the most absurd: tulip mania. Between 1634 and 1637, citizens of the Dutch Republic became obsessed with the flower. Tulips were briefly sold for astronomical amounts. In Extraordinary Popular Delusions and the Madness of Crowds, Charles MacKay recounts how, at the peak of the mania, a single tulip bulb was exchanged for twelve acres of land.

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Taylor, “The Case (for and) against Multi-level Marketing,” Consumer Awareness Institute, 2011. 55 cooling out the mark: Erving Goffman, “On Cooling the Mark Out,” Psychiatry, 1952. 59 “The thing that makes money money is trust”: Jacob Goldstein, Money: The True Story of a Made-Up Thing (Hachette Books, 2020), p. 31. 61 no depositor has ever lost a penny: FDIC: Federal Deposit Insurance Corporation, n.d., “History of the FDIC,” https://fdic.gov/about. 62 We tried private money . . . during the free banking era: Arthur J. Rolnick and Warren E. Weber, “Free Banking, Wildcat Banking, and Shinplasters,” Federal Reserve Bank of Minneapolis Quarterly Review, Fall 1982. 64 tulip mania: Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (Richard Bentley, 1841). 66 commitment to the gold standard . . . fraught situation: Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (The Penguin Press, 2009), p. 439. CHAPTER 5: SXSW, THE CIA, AND THE $1.5 TRILLION THAT WASN’T THERE 74 Axie Infinity: Olga Kharif, “Hackers Steal About $600 Million in One of the Biggest Crypto Heists,” Bloomberg, March 29, 2022. 83 Celsius’s chief financial officer had been arrested: Dan McCrum, Kadhim Shubber, and Mehul Srivastava, “Israeli judge lifts gagging order revealing Celsius Network CFO’s arrest,” Financial Times, March 1, 2022. 83 Mashinsky and his confederates: Interview with Alex Mashinsky, SXSW (Austin, TX), March 13, 2022. 86 Whinstone Bitcoin . . . owned by Riot Blockchain: Olivia Raimonde, “Crypto Miner Riot Blockchain to Buy Whinstone for $651 Million,” Bloomberg, April 8, 2021. 88 We were met by CEO Chad Harris: Interview with Chad Harris, Whinstone executive offices (Rockdale, TX), March 14, 2022. 90 In 2021, the greenhouse gases . . . by electric vehicles globally: Alex de Vries et al., “The true costs of digital currencies: Exploring impact beyond energy use,” One Earth, June 18, 2021.

Narrative Economics: How Stories Go Viral and Drive Major Economic Events
by Robert J. Shiller
Published 14 Oct 2019

For example, gold has held tremendous value in the public mind for thousands of years, but the public could just as well have accorded it little value if people had started using something else for money. People value gold primarily because they perceive that other people value gold. In addition, Peter Garber, in his book Famous First Bubbles (2000), points out that bubbles can last a long time. Long after the seventeenth-century tulip mania, rare and beautiful tulips continued to be highly valued, though not to such extremes. To some extent, tulip mania continues even today, in a diminished form. The same might happen to Bitcoin. Nonetheless, the value of Bitcoin is very unstable. At one point, according to a headline in the Wall Street Journal, the US dollar price of Bitcoin rose 40% in forty hours2 on no clear news.

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There is an impressive mathematical theory underlying cryptocurrencies, but the theory does not identify what might cause people to value them or to believe that other people will also think they have value. Often, detractors describe the valuation of Bitcoin as nothing more than a speculative bubble. Legendary investor Warren Buffett said, “It’s a gambling device.”1 Critics find its story similar to the famous tulip mania narrative in the Netherlands in the 1630s, when speculators drove up the price of tulip bulbs to such heights that one bulb was worth about as much as a house. That is, Bitcoins have value today because of public excitement. For Bitcoin to achieve its spectacular success, people had to become excited enough by the Bitcoin phenomenon to take action to seek out unusual exchanges to buy them.

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.: bigly and yuge coined by, 244; downplaying modesty and compassion, 150; gold standard and, 156, 173; modeling ostentatious living, 272; narrative of, xii, 225–26 Trump administration, less generosity toward the poor during, 272 Trump supporters, resembling Silverites, 162–63 Trump University, 226 trust, in business dealings, 101 trusts, public anger about, 181 tulip mania in 1630s, 4, 5 Tversky, Amos, 66 Twain, Mark, 124 Twitter: meme quickly going viral on, 88; retweeting of mostly false stories on, 96–97 Typhoid Mary, 20 tyranny of metrics, 75, 306n5 Uchitelle, Louis, 150 Uncharted: Big Data as a Lens on Human Culture (Aiden and Michel), 24 Uncle Tom’s Cabin (Stowe), 33 underconsumption theory, 187–92 Understanding the Process of Economic Change (North), 14 unemployment: artificial intelligence narrative and, 273; automation and, 199–200, 204; constant reminders of possibility of, 89; crime and, 141, 142; in depression during 1890s, 111; employee morale and, 147; gold standard and, 172; in Great Depression of 1930s, xiv, 111, 132, 141, 142, 143, 146–47, 172, 187, 189–91, 193; Kiplinger’s 1930 list of causes of, 130, 132; labor-saving machinery narrative and, xiv, 9, 130, 177–81, 187–88, 191–92; narratives focused on massive occurrence of, 129–31; Nazi Party’s rise in Germany and, 195; robotics and, 209; technology raising specter of, 8–9, 130; underconsumption theory and, 187–91.

The Physics of Wall Street: A Brief History of Predicting the Unpredictable
by James Owen Weatherall
Published 2 Jan 2013

Tulips bulbs are typically planted in the fall and then harvested in the late spring. But winter was the prime time for speculation because this was when would-be investors had the least information about the supply for the coming year: the old bulbs had been planted but the new bulbs and cut flowers were not yet available. It was during the winter of 1636–37 that tulip mania (as it is now called) reached its height. That winter, a single bulb sold for as much as 5,200 guilders (more than $60,000 for one tulip bulb!). And then one day in February 1637, at an otherwise ordinary tulip auction in Haarlem, the bidding stopped too soon. Apparently no one had invited the next batch of tulip fools.

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No one wants to be left out, and so we tend to copy one another. Ordinarily, though, we do not act like lemmings. Even if we look to one another for guidance, we do not usually follow blindly. The question, then, is why under some circumstances herding seems to take over. How does something like tulip mania strike? When do the normal mental brakes that would keep someone from spending his entire life savings on a tulip bulb give out? Sornette doesn’t have an answer to this question, though he has developed some models that predict which circumstances will lead herding effects to become particularly strong.

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“. . . realized that Sornette’s earlier work . . .”: The first paper on this topic was Sornette (1996); it was greatly expanded the following year in Sornette and Johansen (1997). “. . . in 1841, Charles Mackay wrote a book . . .”: This is Mackay (1841). “Perhaps the most striking example . . .”: For more on tulip mania, see Dash (1999) and Goldgar (2007); for another, more skeptical perspective, see Thompson (2007). “That winter, a single bulb . . .”: These numbers are from Dash (1999). “Since first predicting the October 1997 crash . . .”: See the description of his predictions in Sornette (2003); my reports on his more recent successes are from private communication

The New Trading for a Living: Psychology, Discipline, Trading Tools and Systems, Risk Control, Trade Management
by Alexander Elder
Published 28 Sep 2014

Their judgment becomes clouded after they join the crowd. Caught up in crowd emotions, many traders deviate from their plans and lose money. Experts on Crowds Charles Mackay, a Scottish barrister, wrote his classic book, Extraordinary Popular Delusions and the Madness of Crowds, in 1841. He described several mass manias, including the Tulip Mania in Holland in 1634 and the South Seas investment bubble in England in 1720. The tulip craze began as a bull market in tulip bulbs. The long bull market convinced the prosperous Dutch that tulips would continue to appreciate. Many abandoned their businesses to grow tulips, trade them, or become tulip brokers.

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When the crowd becomes highly bullish, get ready to sell, and when it becomes strongly bearish, get ready to buy. This is the contrary opinion theory, whose foundations were laid by Charles Mackay, a Scottish barrister. His classic book, Extraordinary Popular Delusions and the Madness of Crowds (1841) describes the infamous Dutch Tulip Mania and the South Seas Bubble in England. Humphrey B. Neill in the United States applied the theory of contrary opinion to stocks and other financial markets. In his book, The Art of Contrary Thinking, he made it clear why the majority must be wrong at the market's turning points: prices are established by crowds, and by the time the majority turns bullish, there aren't enough new buyers to support a bull market.

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timing of trades and and volume of trading Trend-following indicators Directional system MACD Lines in Triple Screen trading system Trendlines: diagonal subjectivity of TRIN Triple bullish or bearish divergences Triple Screen trading system choosing timeframes in day-trading entry technique screen Force Index in market tide screen market wave screen objective of Stochastic signals in stops and profit targets in trend-following indicators and oscillators True breakouts True Range (TR) Tulip Mania 12-step programs Twelve Steps and Twelve Traditions (AA) 20-day New High–New Low Index 2% Rule in futures markets as a guideline for pyramiding for institutional traders and Iron Triangle of risk control Two Roads Diverged: Trading Divergences (Alexander Elder) Tyson, Mike U Uncertainty Undecided traders Undercapitalization myth U.S. stock market: price cycles in trends in Unstuff Your Life (Andrew J.

The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality
by Brink Lindsey
Published 12 Oct 2017

As a result, up to 80 percent of all new home mortgages are being securitized and backed by these state-owned enterprises as of 2016.15 II WE’RE FOREVER BLOWING BUBBLES For all the arcane jargon and hyper-sophisticated financial engineering associated with it, at the bottom of the subprime fiasco was a very old and familiar phenomenon: an asset bubble. Going back to tulip mania in the 1630s, asset bubbles have always been a feature of capitalism. Prices for some investment good start rising for whatever reason, which attracts other investors who want in on the action. At some point, the upswing in prices takes on a life of its own. Prices keep going up simply because people think they will, regardless of the underlying fundamentals.

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See digital era/information technology Teles, Steven M., 14, 36, 161 Temin, Peter, 11 temporary monopolies, 16, 73 TFP. See total factor productivity “third party support”, 155 Thomas, Diana, 186n14 “Tobin’s Q”, 19–20, 22–23 total factor productivity, 24–27, 78–79 “Treaty of Detroit”, 11 Trump, Donald, 2–4, 8 tulip mania, 46 unionization, 6, 11, 31, 146, 157 collective bargaining and, 28 decline of, 91–92 post-New Deal, 29 upstream innovation, 74 upward mobility, 1, 30, 97–98, 143 upward redistribution, 12–14, 28–31, 127. See also redistribution of wealth homeownership and, 121–22 land-use and, 110 mortgage lending and, 39 urban areas, 114–15 VA.

Crisis Economics: A Crash Course in the Future of Finance
by Nouriel Roubini and Stephen Mihm
Published 10 May 2010

While important and destabilizing, these episodes were crises of confidence in overindebted governments, not of capitalism. But with the emergence of the Netherlands as the world’s first capitalist dynamo in the sixteenth and seventeenth centuries, a new kind of crisis made its appearance: the asset bubble. In the 1630s “tulip mania” gripped the country, as speculators bid up the prices of rare tulip bulbs to stratospheric levels. While historians continue to debate the consequences of this bit of speculative fever (and some economists even deny it was a bubble, arguing that all bubbles are driven by fundamentals), it set the stage for larger bubbles whose destructive effects are not in doubt.

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.: Princeton University Press, 2009). 20 Before the rise of capitalism: Reinhart and Rogoff, This Time Is Different, 86-89, 101-11, 174-81. 20 The Chinese pioneered: Peter Bernholz, Monetary Regimes and Inflation: History, Economic and Political Relationships (Cheltenham, U.K.: Edward Elgar, 2003), 53. 20 “tulip mania”: See, for example, Peter M. Garber, “Tulipmania,” Journal of Political Economy 97 (1989): 535-60; Anne Goldgar, Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age (Chicago: University of Chicago Press, 2007). 20 John Law’s Mississippi Company: John Law, A Full and Impartial Account of the Company of Mississippi (London, 1720); Antoin E.

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INDEX AAA ratings reforms and senior tranche and Abu Dhabi ABX Index ACA advanced economies current account deficits in current account surpluses in fiscal deficits of Great Moderation and recovery and see also specific countries Africa agency debt aggregate demand deflation and AIG bailout of credit default swaps of credit rating of write-downs of Ambac American Century American Home Mortgage American Recovery and Reinvestment Act (2009) antitrust laws A rating arbitrage jurisdictional regulatory Argentina debt crisis in Asia financial crisis in IMF and sovereign wealth funds in see also specific countries asset-backed commercial paper (ABCP) Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Fund (ABCPMMMFLF; AMLF) Asset-Based Reserve Requirements (ABRRs) asset bubbles in emerging markets excessive credit and future price increases and monetary policy used to deal with panic of 1825 and tulip mania assets: of banks foreign identical illiquid bank leverage and prices of r isk-adjusted securities backed by selling of toxic, proposals for U.S. protectionism and value of see also specific types of assets Associated Press asymmetric information problem auction-rate securities Australia Austria Austrian School auto industry see also specific companies auto loans automobiles, service contracts for auto theft insurance Bachelier, Louis Bagehot, Walter on lending on panic of baht, Thai bailouts aftermath of of AIG of Bear Stearns in Dubai of European banks IMF and LTCM of Mexico moral hazard and recovery and balance of financial terror Baltic Dry Index Baltic states bancor bankers, compensation of Bankers Trust Bank for International Settlements bank holding companies banking system, money removed from Bank of America Countrywide absorbed by government insurance partnership with leverage of Bank of Canada Bank of England FSA vs.

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives)
by David Birch
Published 14 Jun 2017

After all, tulips are in the end pretty and people like them, whereas no one would accept marks on paper rather than bullion. Yet it was in Amsterdam that an entirely new kind of bank was founded: the Amsterdam bourse began to develop new kinds of trading supported by that bank, and the well-known crisis caused by tulip mania led to regulated derivatives markets (Jay 2000). This came about because of an innovation in the relationship between banks and markets. There had been calls for some sort of ‘payments bank’ (that is, a financial institution that did not extend credit, and therefore could not fail, but that could facilitate value transfers between people) as far back as the fourteenth century in Venice.

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In modern terms it meant that merchants were able to allocate their capital in the most efficient ways. Among other things, the bourse traded derivatives. Futures trading in the Amsterdam markets had its origin in the sixteenth century and futures were traded on the Amsterdam exchange just like any other commodity. Derivatives fed the tulip mania and the subsequent crash, although the reasons for the crisis and crash are not as clear as you might think. Some observers see the tulip market’s collapse as a response to financial regulation, not market fundamentals (see ‘Was tulipmania irrational?’, The Economist, 4 October 2013). Government officials, who were themselves speculating on the markets, were planning a rule change to convert futures contracts into options, which would mean that people who had undertaken to buy tulip bulbs in the future could pay a small amount to cancel the contracts if the price was not in their favour.

How to DeFi
by Coingecko , Darren Lau , Sze Jin Teh , Kristian Kho , Erina Azmi , Tm Lee and Bobby Ong
Published 22 Mar 2020

Retrieved from https://help.dydx.exchange/en/articles/2906496-what-is-liquidation-and-when-will-liquidation-occur Zhang, Y., Chen, X., & Park, D. (2018). Formal Specification of Constant Product (x x y = k) Market Maker Model and Implementation. Retrieved from https://github.com/runtimeverification/verified-smart-contracts/blob/uniswap/uniswap/x-y-k.pdf ~ Chapter 8: Decentralized Derivatives Tulip Mania (n.d.). Retrieved from https://penelope.uchicago.edu/~grout/encyclopaedia_romana/aconite/tulipomania.html Chen, J. (2020, January 27). Derivative. Retrieved from https://www.investopedia.com/terms/d/derivative.asp Decentralised synthetic assets. (n.d.). Retrieved from https://www.synthetix.io/products/exchange/ Synthetix.Exchange Overview. (2019, February 15).

The Art of Execution: How the World's Best Investors Get It Wrong and Still Make Millions
by Lee Freeman-Shor
Published 8 Sep 2015

Investors seem to be hard-wired to follow the herd, so we need to be careful when riding a winning stock. Charles Mackay, in his 1841 book Extraordinary Popular Delusions and the Madness of Crowds, examined three bubbles (the 18th-century Mississippi project, the South Sea bubble, and the 17th-century Dutch tulip mania). His research showed how people lose the ability to think rationally under pressures of crowd behaviour. At the height of a bull market or in the depths of a bear market people become herd-minded. And it is rarely safe to be relying on irrationality for profit for too long. “I learned that even though markets look their very best when they are setting new highs, that is often the best time to sell.

Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies
by Nik Bhatia
Published 18 Jan 2021

These vacillations are ingrained into Bitcoin’s maturation and will separate early adopters from those who will wait for the price to stabilize in USD terms. None of this volatility, however, precludes BTC from being a store of value and an alternative to currencies based on aging archetypes. In reality, Bitcoin is nothing like the Dutch tulip mania. Bubbles don’t burst three times in a decade and come back stronger each resurgence, and the investing public is finally waking up to this fact. In 2020, some of the most legendary hedge fund investors of this generation, Paul Tudor Jones and Stanley Druckenmiller, acknowledged ownership of BTC.

Paper Promises
by Philip Coggan
Published 1 Dec 2011

Meanwhile banks become unwilling to lend, and indeed demand repayment of their loans, further weakening the supply/demand balance. In the case of American housing, homeowners walked away from their loans or faced foreclosure from the banks, leaving behind a glut of empty houses that weighed on the markets. Charles Kindleberger, a great historian of bubbles, used the Minsky model to examine everything from tulip mania in the seventeenth century to John Law’s system and the Asian crisis of the late 1990s. He showed they followed a template of a ‘displacement’ – some development like a war or technological change – credit expansion, over-trading (the final speculative phase), followed by distress (as some investors try to exit) and revulsion, as all who took part are berated for their stupidity.

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Rubin, Robert Rueff, Jacques Rumsfeld, Donald Russia Sack, Alexander St Augustine Saint-Simon, duc de Salamis (city) Santelli, Rick Sarkozy, Nicholas Saudi Arabia savings savings glut Sbrancia, Belen Schacht, Hjalmar Scholes, Myron shale gas Second Bank of the United States Second World War Securities and Exchange Commission seignorage Shakespeare, William share options Shiller, Robert short-selling silver Singapore Sloan, Alfred Smith, Adam Smith, Fred Smithers & Co Smithsonian agreement Snowden, Philip Socialist Party of Greece social security Société Générale solidus Solon of Athens Soros, George sound money South Africa South Korea South Sea bubble sovereign debt crisis Soviet Union Spain special drawing right speculation, speculators Stability and Growth pact stagnation Standard & Poor’s sterling Stewart, Jimmy Stiglitz, Joseph stock markets stop-go cycle store of value Strauss-Kahn, Dominque Strong, Benjamin sub-prime lending Suez canal crisis Suharto, President of Indonesia Sumerians supply-side reforms Supreme Court (US) Sutton, Willie Sweden Swiss franc Swiss National Bank Switzerland Sylla, Richard Taiwan Taleb, Nassim Nicholas taxpayers Taylor, John tea party (US) Temin, Peter Thackeray, William Makepeace Thailand Thatcher, Margaret third world debt crisis Tiernan, Tommy Times Square, New York tobacco as currency treasury bills treasury bonds Treaty of Versailles trente glorieuses Triana, Pablo Triffin, Robert Triffin dilemma ‘trilemma’ of currency policy Truck Act True Finn party Truman, Harry S tulip mania Turkey Turner, Adair Twain, Mark unit of account usury value-at-risk (VAR) Vanguard Vanity Fair Venice Vietnam War vigilantes, bond market Viniar, David Volcker, Paul Voltaire Wagner, Adolph Wall Street Wall Street Crash of 1929 Wal-Mart wampum Warburton, Peter Warren, George Washington consensus Weatherstone, Dennis Weimar inflation Weimar Republic Weinberg, Sidney West Germany whales’ teeth White, Harry Dexter William of Orange Wilson, Harold Wirtschaftswunder Wizard of Oz, The Wolf, Martin Women Empowering Women Woodward, Bob Woolley, Paul World Bank Wriston, Walter Xinhua agency Yale University yen yield on debt yield on shares Zambia zero interest rates Zimbabwe Zoellick, Robert Philip Coggan is the Buttonwood columnist of the Economist.

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire
by Bruce Nussbaum
Published 5 Mar 2013

Charles Kindleberger’s Manias, Panics and Crashes: A History of Financial Crises, was hugely popular when it came out in 1978. British journalist and essayist Walter Bagehot had written about financial crises in Lombard Street, London’s financial district, back in the latter half of the nineteenth century. And who hasn’t heard of the extraordinary tulip mania in the Netherlands of the 1630s, popularized in Charles Mackay’s 1841 book Extraordinary Popular Delusions and the Madness of Crowds? Of course, we don’t need to look that far back, considering that we’ve all lived through two major manias of our own, the dot-com bubble and the housing boom and bust.

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See also Culture of capitalism, 241 creativity and, 7–8, 21, 24–27, 30–31, 247 drinking habits and, 117–18 gaming and, 142–43 Indie Capitalism and, 38 Sociology, framing and, 88–89 Solomon, Lisa K., 107–9, 114 Songwriting, 3–9, 66 Sony VCRs, 93 South Korea, 106–7 Space cargo transport business, 147–49 Space stations, 109–10 SpaceX (Space Exploration Technologies Corporation), 66, 147–49 Sparked, 102 Specialization, 77–78 Spies, recruitment of CIA, 17–20, 27 Spills, engagement framing of, 102 Spitballing, 59 Sports, capitalism and, 120 Spotify, 256 Spring Health, 69–70 Stanford University, 17, 34–35, 72, 180, 251–52 StarCraft II game, 137 Start-ups creative hubs for, 72–73 disruptive innovations of, 28–29 e-commerce platforms and, 162–66 education and, 121 job creation by, 239 in New York, 181–82 social enterprise and, 158 venture capital and, 243–45 Stern, Sam, 194–95 Stewart, Martha, 104 Stigler, George, 228 Stock options, 230 Stone, Biz, 121–22 Storytelling, framing and, 92–97, 110–15 Strategies pivoting, 215–20 playing and, 119, 141–45 Strickler, Yancey, 86–88 Studio Neat, 171 Subprime mortgages, 231 Summer day camp games, 137 Summers, Lawrence, 232 Summit on the Future of Design, 251–52 SuperBetter program, 131–32 Sustainability, 46–48, 157–59 Sutton, Thomas, 129 Systrom, Kevin, 182, 207 Taleb, Nassim Nicholas, 228 Tanizaki, Jun’ichiro, 185–86 Taxes, Indie Capitalism and, 248 Taylor, Kathleen, 101–2 Teams creativity and, 21–22 playing and, 122–23, 142–44 Tea Party, 90, 151 TechCrunch, 214 Technion, 182 TechShop, 173 TED conferences, 72 Tesla Motors, 148 Tests, creativity, 19–24, 252 Tetra Paks, 117–18, 123, 127–28 Text messages, 99–100 Thiel, Peter, 215, 235 Thinking connecting dots in, 59–60 design, 14–17, 28 divergent, 21 outside-in, 108–9 ThinkJet printer, 190–97 Thomas, Maria, 166 Threadless (company), 86 Tools, 38–39, 155–56 Top Chef TV program, 254–55 Torrance, Ellis Paul, 21 Toys, wooden, 162–66 Trade deficit, 235 Trade policy, 246 Treadle irrigation pumps, 68 Trends, what-if framing and, 106–10, 114–15 Tripod, iPhone, 167–71 Trust creativity and, 26 destruction of, at Hewlett-Packard, 225 playing and, 127, 143 T-shirt makers, 86 Tulip mania, 229 Tumblr, 155, 165–66, 181, 202 TV, reality, 254 Twitter, 104, 121, 202 Typewriters, 155–56 Typography, 43–44 Umpqua Bank, 113–14 Uncertainty. See also Risk creativity and, 7, 27, 30 economics of, 242 efficient market theory and, 228–31 framing and, 110–15 gaming and, 135–38, 141–45 Gilt fashion platform and, 132–33 global environment and, 32–33 Indie Capitalism and, 240 playing and, 35 Union Square Ventures, 181 United States culture of, 31 failure of innovation in, 234–37 military war games in, 120 political parties of, 94 reshoring of manufacturing to, 160–62 Universities.

Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond: The Innovative Investor's Guide to Bitcoin and Beyond
by Chris Burniske and Jack Tatar
Published 19 Oct 2017

Speculative bubbles are particularly dangerous when there is no underlying long-term value proposition to the asset. In these cases, it’s as bad as gambling (or worse, as there’s an illusion of value). We sometimes hear skeptical investors warn of the dangers of bitcoin. Nout Wellink, the former president of the Dutch Central Bank, is famous for saying, “This is worse than the tulip mania. At least then you got a tulip, now you get nothing.”19 While we understand that some may have a hard time grasping that something with no physical form could have value, at this point in its life, bitcoin is a far cry from tulips. The key to understanding bitcoin’s value is recognizing it has utility as “Money-over-Internet-Protocol” (MoIP)—allowing it to move large amounts of value to anyone anywhere in the world in a matter of minutes—which drives demand for it beyond mere speculation.

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Niall Ferguson, The Ascent of Money: A Financial History of the World (Penguin, 2008). 10. Edward Chancellor, Devil Take the Hindmost. 11. http://penelope.uchicago.edu/~grout/encyclopaedia_romana/aconite/semperaugustus.html. 12. Edward Chancellor, Devil Take the Hindmost. 13. Ibid. 14. http://www.bbc.com/culture/story/20160419-tulip-mania-the-flowers-that-cost-more-than-houses. 15. Edward Chancellor, Devil Take the Hindmost. 16. http://www.economist.com/blogs/freeexchange/2013/10/economic-history. 17. http://penelope.uchicago.edu/~grout/encyclopaedia_romana/aconite/semperaugustus.html. 18. Edward Chancellor, Devil Take the Hindmost. 19. https://www.theguardian.com/technology/2013/dec/04/bitcoin-bubble-tulip-dutch-banker. 20. https://coinmarketcap.com/currencies/steem/. 21. https://z.cash/. 22.

Boom and Bust: A Global History of Financial Bubbles
by William Quinn and John D. Turner
Published 5 Aug 2020

Dale, Johnson and Tang, ‘Financial markets can go mad’; Garber, Famous First Bubbles; Shiller, Irrational Exuberance. 36. Opp, ‘Dump the concept of rationality’. 37. These criteria are very close to those used by Goetzmann, ‘Bubble investing’ and Greenwood et al., ‘Bubbles for Fama’. 38. Greenwood et al., ‘Bubbles for Fama’. 39. See Posthumus, ‘The tulip mania’. 40. Goldgar, Tulipmania. 41. Garber, ‘Tulipmania’; Garber, Famous First Bubbles. 42. Thompson, ‘The tulipmania’. 43. Mackay, Memoirs of Extraordinary Popular Delusions, 2nd edition. 44. Goldgar, Tulipmania, p. 6. 45. Goldgar, Tulipmania, pp. 6–7. 46. Englund, ‘The Swedish banking crisis’; Moe, Solheim and Vale, ‘The Norwegian banking crisis’; Nyberg, ‘The Finnish banking crisis’; Radlet et al., ‘The East Asian financial crisis’. 226 NOTES TO PAGES 14–23 47.

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‘The double bubble at the turn of the century: technological roots and structural implications’, Cambridge Journal of Economics, 33, 779–805, 2009. Pope, D. ‘Free banking in Australia before World War I’, ANU Working Papers in Economic History, No. 129, 1989. Posen, A. S. ‘Why central banks should not burst bubbles’, International Finance, 9, 109–24, 2006. Posthumus, N. W. ‘The tulip mania in Holland in the years 1636–37’, Journal of Economic and Business History, 1, 434–55, 1929. Postman, N. Amusing Ourselves to Death: Public Discourse in the Age of Showbusiness, New York: Penguin. 1985. Powell, E. T. The Evolution of the Money Market, 1385–1915. London: Frank Cass, 1966. Pressnell, L.

The Confidence Game: The Psychology of the Con and Why We Fall for It Every Time
by Maria Konnikova
Published 28 Jan 2016

The convincer is precisely that: wholly convincing. Why quit while you’re ahead, if you are certain you’ll remain ahead in the future? The ebullient optimism that doesn’t see its own demise isn’t a function of modern markets, either; it’s far older and more pervasive than that. One of the most famous bubbles in history was the great Dutch tulip mania—tulpenwoede—of the early seventeenth century. So desired were the flowers, and so high their price, that in the 1630s a sailor was jailed for mistaking one for an onion and eating it. While the story is likely apocryphal, the sentiment is not. At the bubble’s peak in 1637, some bulbs had increased in price twentyfold in a three-month period.

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A., ref1, ref2 Carnegie, Andrew ref1 Carnegie, Dale ref1, ref2 Carney, Bruce ref1 Carr, Sarah ref1 Carro, Gregory ref1 Catch Me If You Can, ref1 caterpillars ref1 Cayuga, HMCS ref1, ref2 Cerf, Moran ref1, ref2 Chabris, Christopher ref1 Chadwick, Cassie ref1 Chaiken, Shelly ref1 chameleon effect ref1 change strategies ref1, ref2, ref3 Chaucer, Geoffrey ref1 Chen, Peter ref1 choices ref1, ref2, ref3 Chonko, Lawrence ref1 Choong, Lee ref1, ref2 Christie, Richard ref1 Cialdini, Robert ref1, ref2, ref3, ref4, ref5, ref6 Clore, Gerald ref1 Codol, Jean-Paul ref1 cognitive dissonance ref1 Cohen, Steven ref1 coins ref1, ref2 commons ref1 communities ref1 Confidence Man, The (Melville), ref1 confirmation bias ref1, ref2, ref3 Consumer Fraud Research Group ref1 control, illusion of ref1 conversations ref1 convincer ref1, ref2, ref3, ref4 Cooke, Janet ref1 corporate fraud ref1 Craigslist ref1, ref2 credibility ref1 creeping determinism ref1 Crichton, Judy ref1 Crichton, Robert ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 Crichton, Sarah ref1 cuckoo finch ref1 cults ref1, ref2, ref3, ref4 culture ref1 Cummine, Andrew ref1 Curry, Robert ref1 Dal Cin, Sonya ref1 dark triad of traits ref1, ref2 psychopathy ref1, ref2, ref3, ref4 Davis, Barbara ref1 Dean, Jeremy ref1 DeBruine, Lisa ref1 decision making ref1, ref2, ref3, ref4, ref5 Dedalus Foundation ref1, ref2 default effects ref1, ref2 Demara, Ferdinand Waldo, Jr., ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9, ref10, ref11, ref12, ref13 Crichton and ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8 at monasteries ref1, ref2, ref3 as navy surgeon ref1, ref2, ref3 “papering” tactic of ref1 as prison warden ref1, ref2, ref3, ref4 school gifts from ref1 Demara, Ferdinand Waldo, Sr., ref1 Demara, Mary McNelly ref1, ref2 determinism, creeping ref1 Deveraux, Jude ref1 De Védrines, Christine ref1 De Védrines, Ghislaine ref1, ref2 “Diddling” (Poe), ref1 disasters ref1 disrupt-then-reframe ref1 Dittisham Lady, ref1, ref2 door-in-the-face ref1, ref2 Drake, Francis ref1, ref2, ref3, ref4, ref5 Dunbar, Robin ref1, ref2, ref3 Dunning, David ref1 Dutch tulip mania ref1 Dylan, Bob ref1 Ebola crisis ref1 Egan, Michael ref1 Eiffel Tower ref1 Ekman, Paul ref1, ref2, ref3 elaboration likelihood model ref1 elder fraud ref1 Elizabeth I, Queen ref1 Emler, Nicholas ref1, ref2 emotions ref1, ref2, ref3, ref4, ref5, ref6, ref7 anticipation of ref1 donations and ref1 stories and ref1, ref2, ref3, ref4, ref5, ref6 endowment effect ref1, ref2 entrapment effect ref1 environment ref1 Epley, Nicholas ref1, ref2, ref3 Epstein, Seymour ref1, ref2 Erdely, Sabrina Rubin ref1 Evans, Elizabeth Glendower ref1 even-a-penny scenario ref1, ref2 exceptionalism ref1, ref2, ref3, ref4 expectancies ref1, ref2 exposure ref1, ref2 Extraordinary Popular Delusions and the Madness of Crowds (Mackay), ref1 Eyal, Tal ref1 Facebook ref1, ref2, ref3, ref4, ref5, ref6, ref7 facial expressions ref1, ref2, ref3 Fallon, James ref1 familiarity ref1, ref2, ref3, ref4 Farms Not Factories ref1 FBI ref1, ref2, ref3 fear ref1 Feldman, Robert ref1 Fenimore, Karin ref1 Festinger, Leon ref1, ref2, ref3 Fetzer, Barbara ref1 Figes, Orlando ref1 Fischhoff, Baruch ref1, ref2 Fiske, Susan ref1 Fitzgerald, Alan and Eilis ref1 Fitzgerald, Elizabeth (Madame Zingara), ref1, ref2 fix ref1 Folt, Carol ref1 football ref1 foot-in-the-door ref1, ref2, ref3, ref4 Frampton, Anne-Marie ref1, ref2, ref3 Frampton, Paul ref1, ref2, ref3, ref4, ref5, ref6, ref7, ref8, ref9 Frank, Jerome ref1 Franklin, Benjamin ref1, ref2 Franklin Syndicate ref1, ref2, ref3, ref4 Fraser, Scott ref1 Freedman, Ann ref1, ref2, ref3, ref4, ref5, ref6, ref7 Freeman, Jonathan ref1 French, John ref1, ref2 Fund for the New American Century ref1 future ref1 predicting ref1, ref2, ref3, ref4 Galinsky, Adam ref1 gambler’s fallacy ref1, ref2 Gant, Robert ref1 Geis, Florence ref1 genetics ref1 Gerard, Harold ref1 Gerhartsreiter, Christian ref1 Gifford, Adam Lord ref1 Gilbert, Daniel ref1, ref2 Gilligan, Andrew ref1 Gilovich, Thomas ref1 Glass, Stephen ref1, ref2 Goetzinger, Charles ref1 Gondorf, Fred and Charles ref1 Goodrich, Judge ref1 Gordon, John Steel ref1 gorilla experiment ref1 gossip ref1, ref2, ref3 Goya, Francisco ref1 Grazioli, Stefano ref1 Great Imposter, The (Crichton), ref1, ref2, ref3 Green, Melanie ref1, ref2 Green Dot cards ref1 Greg ref1 grifter ref1 grooming ref1 groups, belonging to ref1 Guillotin, Joseph ref1 Gur, Ruben ref1 Gurney, Edmund ref1 Hancock, Jeffrey ref1 Hansen, Chris ref1 Hanson, Robert ref1 happiness ref1, ref2, ref3 Hare, Robert ref1 Harley, Richard ref1 Harlow, E.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

Nor was it different from past entrepreneurship because it could raise capital to fund new enterprises. Merchants, explorers, and voyagers had done that for centuries, but the fortunes of the trade they created never spread widely in the economy. The premodern economic system was full of speculative capital and asset bubbles, such as the Dutch tulip mania in the 1600s or the French Mississippi finance bubble in the 1700s. All past ages have had their own financial sharks and Bernie Madoff-type hustlers. A defining characteristic of modern capitalist entrepreneurship, to follow economic historian Alexander Gerschenkron, was rather one of time: investments in big innovation needed far longer to generate expected economic gains.

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(i) cargo services and deregulation (i) see also air cargo services cash hoarding (corporate savings) (i), (ii), (iii), (iv), (v) catalytic converter technology (i) Central Europe, German-Central European supply chain (i), (ii) chemicals, and EU regulation (i), (ii) Chicago school of economics (i) Chili, and Cybersyn project (i) China and BRIC concept (i), (ii) exports from European Union (i) GDP (2014) (i), (ii) and globalization (i), (ii), (iii) R&D spending (i) sovereign wealth fund (i) Christensen, Clayton (i), (ii) Churchill, Winston (i) Clark, Gregory (i), (ii)n41 classical market liberalism (i) Clinton, Bill (i) Club des Chiffrephiles (i) Coase, Ronald (i), (ii), (iii), (iv), (v) Coca-Cola (i) Code of Federal Regulations (US) (i) cognition, mechanistic vs. organic (i) collaboration “noise” (i) Comin, Diego (i) command economies (i), (ii) command-and-control (i), (ii) community-generated content, and socialism (i) companies see big firms; firm boundaries; firms; multinational (global) companies competition and bureaucracy (i) and containerization (of global trade) (i) vs. contesting markets (i) and financial regulation (i) and firm boundaries (i), (ii) and geography of production (i) and globalization (i) life-or-death competition (i), (ii), (iii), (iv) and market concentration (i) and mergers and acquisitions (i) move of from countries to firms (i), (ii) and multinationals (i) oligopolistic (or monopolistic) competition (i) and planning machines (i) see also market contestability competitive forces concept (i) complexity “complex by design” capitalism (i) market complexity (i) see also regulatory complexity/uncertainty compliance officers (i) complicatedness index (Boston Consulting Group) (i) compound growth (i) Compustat, corporate cash holdings (i) computer technology/computerization and corporate managerialism (i) and knowledge obsolescence (i) and labor (i) and leisure (i) and market socialism (i) and production (i) and quantum dots/cadmium (i) see also digitalization; ICT (information and communications technology); information technology (IT); software technology Conference Board (economics consultancy) (i), (ii) consolidation (i), (ii) see also mergers and acquisitions Consumer Protection Act (US) (i) containerization (of global trade) (i) contestability see market contestability contracts (i) copying, and strategy (i), (ii) corporate borrowing and low investment growth (i) see also corporate net lending corporate control, and specialization (i) corporate failure see failure corporate globalism (i), (ii), (iii) corporate managerialism and bureaucracy (i), (ii), (iii), (iv), (v) and capitalism, decline of (i), (ii), (iii) corporate destruction and innovation: IBM (i); Microsoft (i), (ii); Nokia (i), (ii), (iii), (iv), (v) formula of failure (i) and globalist worldview (i) and globalization (i), (ii), (iii), (iv) managerial ideology on the rise (i), (ii) planning: planning machines (i), (ii), (iii); risk and uncertainty (i); strategy (i) regulation (i), (ii) regulation and compliance officers (i) Swedish managerialist culture (i), (ii) value vs. numbers (i) see also bureaucracy corporate medical research, and financial regulation (i) corporate net lending (i), (ii) see also corporate borrowing corporate politics (i), (ii), (iii), (iv) see also political world corporate savings (cash hoarding) (i), (ii), (iii), (iv), (v) corporate size and entrepreneurship (i) and globalization (i) and regulation (i) corporate social responsibility (CSR) (i) corporate socialism (i), (ii) corporate socialization (i) corporate valuations (i) costs production costs (i), (ii), (iii) sunk costs (i), (ii), (iii), (iv) transaction costs (i), (ii), (iii), (iv), (v), (vi) transmission costs (i), (ii), (iii) Cowen, Tyler (i) creative destruction fear of and political institutions (i) and globalization (i) and innovation (i), (ii), (iii), (iv), (v) and New Machine Age (i) and Nokia (i) and present-day capitalism (i) see also withering credit rating agencies (i), (ii), (iii) Credit Suisse, on stock markets (i) crony capitalism (i) cronyism (i), (ii), (iii), (iv) culture of experimentation (i), (ii) see also entrepreneurs; entrepreneurship culture of individualism (i) see also dissent; eccentricity; freedom customer loyalty (i) Cybersyn project (i) cyclical effects, and productivity (i) da Vinci, Leonardo see Leonardo da Vinci Darwinianism (i), (ii) Das, Gurcharan (i) data see recorded data (national accounts) data economy, and productivity (i) DAX 30 index (Germany) (i) de Blasio, Bill (i) debt and dividends/share buybacks vs. investment (i), (ii) and economic decline (i) vs. equity funding (i), (ii), (iii), (iv), (v), (vi) and retirement savings (i), (ii) decision-making probabilistic decision-making (i), (ii) and strategy (i) decoupling (productivity/incomes) thesis (i), (ii) deregulation case of air cargo services (FedEx) (i) and diffusion of innovations (i), (ii) OECD product market regulation (PMR) indicators (i), (ii) and reallocation of business (i) and regulatory accumulation (i) wave in 1980s–1990s (i), (ii) see also regulation; regulatory complexity/uncertainty Descartes, René (i) design (i) development vs. research (i), (ii) see also incremental development; R&D diffusion and deregulation (i), (ii) and globalization (i), (ii) and occupational licenses (i) and productivity (i) and R&D (i) “diffusion machine” (i), (ii), (iii) digital age and capitalism (i) and politics (i) digitalization and innovation (i) and leisure (i) and managerialism (i) and productivity growth (i) and regulation (i) and second unbundling of production (i) see also computer technology/computerization; ICT (information and communications technology); information technology (IT); “servicification” (or “servitization”) direct-to-consumer sales (i) dirigisme (France) (i) discriminate dynamism theory (i) dispersed ownership (i) dissent (i), (ii), (iii), (iv) see also culture of individualism; eccentricity diversification and investment (i), (ii) organizational (i), (ii) dividends (i), (ii), (iii), (iv), (v) DJs, and jobs and technology debate (i) dock labor, and containerization (of global trade) (i) Dodd-–Frank Act (US) (i), (ii), (iii), (iv) Dolly the Sheep (i) Dr. Strangelove character (i) driverless vehicles (i), (ii), (iii), (iv) drones, and regulation (i) Drucker, Peter (i), (ii) drugs see pharmaceutical sector dual class stock structures (i) Dutch disease (i) Dutch tulip mania (i) dynamism see discriminate dynamism theory; economic dynamism East Asia, trade and value chains (i) Ebenezer Scrooge character (i) eccentricity (i), (ii), (iii), (iv), (v) see also culture of individualism; dissent economic dynamism and capitalism (i), (ii), (iii) and innovation (i), (ii), (iii) and market contestability (i) economic growth compound growth (i) and productivity (i), (ii) and regulatory complexity/uncertainty (i) see also GDP (gross domestic product) Economic Policy Institute (Washington, DC) (i) The Economist on global corporations (i) on new technology and social dislocation (i) on pensioners vs. working-age households incomes (i) “Planet of the Phones” (i) on share buybacks (i) economy “bazaar economy” (Hans-Werner Sinn) (i) data economy (i) knowledge-based economy (i) “new economy” (i) and technology (i), (ii), (iii) see also economic dynamism; economic growth; financial economy; GDP (gross domestic product) EFAMA, on asset management industry (i) Einstein, Albert (i), (ii) electronic devices (i) electronic wallets (i) embedded liberalism (i) emerging markets (i), (ii), (iii), (iv), (v) employment protection legislation (i) see also labor; unemployment Energy Policy and Conservation Act (EPCA, US) (i) energy sector and antitrust laws (i) and innovation (i) and regulation (i), (ii) renewable/green energy: and regulation in Europe (i), (ii); and sunk costs (i) Engels, Friedrich, Communist Manifesto (Marx and Engels) (i), (ii) Enlightenment (i), (ii) Enron (i) entrepreneurs vs. bureaucrats (i), (ii) vs. managerialists (i) and passion vs. market complexity (i), (ii) Schumpeter on (i) tech entrepreneurs (i) see also entrepreneurship entrepreneurship aging trend (i), (ii) and capitalism (i), (ii) and dual class stock structures (i) and equity financing (i) and globalization (i), (ii) and innovation (i), (ii) and organizational diversification (i) vs. planning machines (i), (ii) and precautionary regulations (i) and size of firms (i) and strategy (i) and uncertainty (i) see also culture of experimentation; culture of individualism; entrepreneurs; start-ups equity vs. debt funding (i), (ii), (iii), (iv), (v), (vi), (vii) and institutional investors (i) and retirement savings (i), (ii) Ericsson (i), (ii) Ericsson, John (i) Europe asset management industry (i) big firms’ relative importance (i) capital expenditure (capex) (i), (ii)n39 corporate renewal levels (i) corporate savings (i) debt vs. equity financing (i) energy sector and antitrust laws (i) German-Central European supply chain (i) higher- vs. lower-income countries (i) labor, and tax (i) labor markets: low rates of flexibility (i); and lower productivity (i) mergers and acquisitions (i) pensions (i) productivity (i), (ii), (iii); total factor productivity (TFP) growth (i) R&D spending (i), (ii) regulation: compliance officers and Basel III (i); deregulation trend (i); index of regulatory freedom (i), (ii); index of regulatory trade barriers (i), (ii); medical devices (i); occupational/professional standards (i); technological platforms (i) services and globalization (i) trade: and big business (i); index of regulatory trade barriers (i), (ii); and value chains (i) see also eurozone; European Union European Food Safety Authority (EFSA) (i) European Union biofuels regulations (i) cadmium exemption issue (i), (ii) capitalist ownership and dual class stocks (i) chemicals regulations (i), (ii) exports to China (i) financial regulations (i), (ii); banks and Basel III rules (i), (ii) genetically modified organisms (GMOs) regulations (i), (ii), (iii) GM potato regulations (i) Leave campaign and older generation (UK) (i) nanotechnology regulations (i), (ii) precautionary principle (i) R&D scoreboards (i), (ii) Single Market (i) see also eurozone; Europe eurozone Germany and “sick man of the euro” label (i) pensions (i) see also Europe; European Union experimentation, culture of (i), (ii) see also entrepreneurs; entrepreneurship external capital markets (i), (ii), (iii), (iv), (v) Fabian Society (i) Facebook (i), (ii), (iii), (iv) failure failing companies and planning (i) formula of failure (i) and innovation process (i) Fairchild Semiconductor (i) FDI (foreign direct investment) (i), (ii), (iii) Federal Deposit Insurance Corporation (i) Federal Express (FedEx) (i), (ii) Feldstein, Martin (i) Fernald, John (i) fiduciary duties and laws (i) financial capitalism (i), (ii), (iii), (iv) see also financial economy financial crisis (2007) and aspirations (i) and financial regulations (i), (ii), (iii) and globalist worldview (i) and rich people vs. capitalists issue (i) and sovereign wealth funds (i) and stock markets (i) and Wall Street (i), (ii) see also Great Recession financial economy and gray capitalism (i), (ii), (iii) vs. real economy (i), (ii), (iii) financial institutions and financial regulations (i), (ii) and globalization (i) SIFIs (systemically important financial institutions) (i) see also banks financial regulations (i), (ii), (iii), (iv) financial sector growth of and productivity (i) financial services, and globalization (i) financial skills, vs. business-building skills (i) Financial Times on compliance officers (i) on French ban on Mercedes-Benz cars (i) Fink, Lawrence (i) Finland dependence on larger enterprises (i) Nokia story (i) firm boundaries and competition (i), (ii) and corporate managerialism (i), (ii), (iii), (iv), (v), (vi), (vii) and globalization (i) and innovation (i), (ii), (iii) and market concentration (i) and multinationals (i), (ii) and pharmaceutical sector (i) and R&D (i), (ii) and specialization (i), (ii), (iii), (iv), (v) see also firms firms entry-and-exit rates (i), (ii), (iii), (iv) high-growth firms (i) home-market firms vs. multinationals (i) interfirm vs. intrafirm trade (i) joint-stock companies (i), (ii) as logistics hubs (i), (ii) role of in the economy (i) start-ups (i), (ii), (iii), (iv), (v) unicorns (i) see also big firms; corporate size; firm boundaries; multinational (global) companies first-mover advantage (i) Food and Drug Administration (FDA, US) (i), (ii), (iii) food retailing, and globalization (i) Ford, Henry (i), (ii) Ford, Martin, The Rise of the Robots (i), (ii) foreign direct investment (FDI) (i), (ii), (iii) Fortune 500 companies (i) Foster, George (i) Foxconn (i) France ban on Mercedes-Benz cars (i) CAC 40 index (i) corporate renewal levels (i) dependence on larger enterprises (i) dirigisme (i) exports to China (i) and globalization (i) productivity, decline in and labor market rules (i) profit margins (i) public debt (i) R&D spending (i) regulation: index of regulatory freedom (i), (ii); index of regulatory trade barriers (i), (ii); medical devices (i); taxi services (i) trade: and big business (i); index of regulatory trade barriers (i), (ii) Fraser Institute, index of regulatory freedom (i), (ii) free-market capitalism (i) free speech, and academia (i) freedom (i), (ii), (iii) see also culture of individualism; dissent; eccentricity French Mississippi finance bubble (i) Frey, Carl Benedikt (i) Friedman, Milton (i) Fukuyama, Francis, The End of History and the Last Man (i) future, the (and how to prevent it) capitalist decline and pessimism (i) from corporate globalism to global corporatism (i) rise of regulatory uncertainty (i) “silver tsunami” for cash and pensions (i) state of Western economies and future imperfect (i) suggested steps to prevent the future: agency and economic history (i); boosting market contestability (i); nurturing culture of dissent and eccentricity (i); severing gray capital–corporate ownership link (i) Future Perfect, A (Micklethwait and Wooldridge) (i) G7 (Group of Seven) countries, labour productivity (i), (ii) Galbraith, John Kenneth, The New Industrial State (i), (ii), (iii), (iv), (v), (vi) Gallup, job satisfaction survey (i) Galston, William (i) Gates, Bill (i) GATT (General Agreement on Tariffs and Trade) (i) see also World Trade Organization (WTO) GDP (gross domestic product) and business investment (i), (ii), (iii) China’s (2014) (i), (ii) declining trend (i), (ii) and financial sector growth (i) GDP statistics issues (i) and global trade (i) and globalization (i) ICT hardware investment as share of (i), (ii) labor’s share of (i) and pensions (i) and R&D spending (i), (ii) and robots (i) Gekko character (Wall Street movie) (i) General Electric (GE) (i), (ii) generations boomer (or baby boomer) generation (i), (ii), (iii), (iv) The Clash of Generations (Kotlikoff and Burns) (i) EU Leave campaign and older generation (UK) (i) and income inequality (i) technology-frustrated generation (i) genetically modified (GM) potato, and EU regulation (i) genetically modified organisms (GMOs), and EU regulation (i), (ii), (iii) geographical zoning laws (i) Germany aging population (i) business investment declining trend (i) car industry: French ban on Mercedes-Benz cars (i); and value chains (i) corporate profit margins (1990–2014) (i), (ii), (iii), (iv) corporate renewal levels (i) DAX 30 index (i) dependence on larger enterprises (i) exports to China (i) German-Central European supply chain (i), (ii) and globalization (i), (ii), (iii), (iv) income inequality and generations (i) pensions (i) productivity: decline in and labor market rules (i); and wages (i) regulation: bureaucracy brake (i); deregulated vs. regulated sectors 148–9 index of regulatory freedom 151, (i); index of regulatory trade barriers 152, (i); medical devices (i); taxi services (i) “sick man of the euro” (i) trade: index of regulatory trade barriers (i), (ii); and value chains (i) Gerschenkron, Alexander (i), (ii) Gerstner, Louis (i) Ghosh, Shikhar (i) Gilder, George (i) global firms see multinational (global) companies global trade and containerization (i) expansion phases (i) and globalization, 2nd phase of (i) growth statistics (i) and market contestability (i) and multinationals (i), (ii) regionalization of Asia’s trade growth (i) regulatory trade barriers (i), (ii), (iii) see also mercantilism; protectionism; trade “Globalise or Fossilise!”

The Levelling: What’s Next After Globalization
by Michael O’sullivan
Published 28 May 2019

I have two obstacles and two provocative solutions in mind. I conceive of them as “a Westphalia Treaty for Finance,” and they make up the third idea in this book. The two obstacles are debt and central banks. It seems the world has learned little from the 2009 global financial crisis or, indeed, the long history of financial crises going back to the tulip mania, the South Sea Bubble, and the Mississippi scheme. Debt levels (global debt to GDP) today are higher than at the beginning of the financial crisis. China, emerging-market governments, corporate America, and select European countries (that is, France) have taken on most new debt. Most of this debt is not productive, in that it doesn’t fuel growth; rather, it has been taken on to patch up economic holes, fuel financial engineering, and buy time rather than to fund new investments.

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From a relative wealth point of view, this again helps those with existing securities portfolios, though it must be said that investors deserve some compensation for holding risky assets in uncertain times. Underlying this, in May 2017, when ECB president Draghi testified on quantitative easing to the Dutch Parliament, he was presented with a solar-powered tulip (by Pieter Duisenberg, son of the first ECB president, Wim Duisenberg) to underscore to him the parallel between the tulip-mania asset price bubble of the mid-seventeenth century and the price of eurozone financial assets (government bonds). Furthermore, because valuations for asset classes like equities and corporate bonds are now so high, the future returns they produce will inevitably be limited, thereby limiting the growth in the value of pensions.

Humankind: A Hopeful History
by Rutger Bregman
Published 1 Jun 2020

Imagine you’re presented with a hundred contestants, but, rather than picking your own favourite, you have to indicate which one others will prefer.10 In this kind of situation, our inclination is to guess what other people will think. Likewise, if everybody thinks everybody else thinks that the value of a share will go up, then the share value goes up. This can go on for a long time, but eventually the bubble bursts. That happened, for example, when tulip mania hit Holland in January 1637, and a single tulip bulb briefly sold for more than ten times the annual wage of a skilled craftsman, only to become all but worthless days later. Bubbles of this kind are not isolated to the financial world. They’re everywhere. Dan Ariely, a psychologist at Duke University, once gave a brilliant demonstration during a college lecture.

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K., here rule of law, here Russell, Bertrand, here Russian Revolution, here, here, here Rwandan genocide, here Ryan, Richard, here St Augustine, here Santos, Juan Manuel, here Sapolsky, Robert, here Sassen, William, here, here Schaaffhausen, Hermann, here Science, here, here, here Scott, James C., here selfishness, here September 11 attacks, here, here Sermon on the Mount, here, here serotonin, here sexual equality, here, here shame, here Shaw, George Bernard, here, here Sherif, Muzafer, here, here, here, here, here Shils, Edward, here, here Sicily campaign, here silver foxes, here, here, here, here, here Simpsons, The, here Singer, Tania, here Sisulu, Walter, here Skilling, Jeffrey, here slavery, here, here, here smallpox, here, here Smedes, Lewis B., here Smith, Adam, here, here Smith, Carlyle, here snipers, here, here social learning, here social psychology, rise of, here socialisation, here sociopathy, here, here, here, here Sodom and Gomorrah, here Sokoloff, Jose Miguel, here, here Solnit, Rebecca, here Sørensen, Carl Theodor, here South Africa, here, here, here Spanish Civil War, here, here Speer, Albert, here Spencer, Herbert, here Spinoza, Baruch, here Stalin, Josef, here, here, here, here, here, here Stanford Prison Experiment, here, here, here, here, here, here, here, here, here Stangneth, Bettina, here Starr, Belle, here states, origins of, here STDs, here Stein, Gertrude, here Sudbury Valley School, here Summerhill School, here Sungir grave, here Sutton-Smith, Brian, here Syrian refugees, here Taleb, Nassim Nicholas, here Taufa’ahau Tupou IV, King of Tonga, here, here, here Taylor, Frederick, here, here Temple of Apollo (Delphi), here Terre’Blanche, Eugène, here terrorists, here, here, here, here Thomas, Elizabeth Marshall, here Thucydides, here Tigris–Euphrates floodplain, here Tilley, Oswald, here Titanic, sinking of, here Tomasello, Michael, here Torres, here, here Totau, Mano, here, here, here, here, here, here Tower of Babel, here Travolta, John, here Treaty of Versailles, here Trilling, Lionel, here Trojan War, here, here Trump, Donald, here, here, here Trut, Lyudmila, here, here, here, here, here tulip mania, here Turchin, Peter, here Twain, Mark, here Twitter, here, here, here Uber, here Uhila, Taniela, here, here unemployment benefits, here University of Delaware, Disaster Research Center, here Uruk, here US Congress, here US Constitution, here, here vaccines, here van der Graaff, Laurens, here Van Reybrouck, David, here Vedda people, here veneer theory, here, here Verdun, Battle of, here, here Vietnam War, here, here, here Viljoen, Abraham, here, here, here, here Viljoen, Constand, here, here, here, here violent deaths, decline in, here Virgin Mary, here virtue labelling, here Voltaire, here Walkington, Leslie, here war crimes, and propaganda, here warfare causes of death, here, here commanders, here and conditioning, here, here and friendship, here, here origins of, here, here, here Ward, Colin, here Warneken, Felix, here, here Warner, Arthur, here Warner, Peter, here, here, here water resources, here Waterloo, Battle of, here, here Wesley, John, here Wichmann, Fabian, here Wigram, Lieutenant Colonel Lionel, here Wikipedia, here Williams, Graham, here Williams, John, here, here Wilson, James Q., here, here, here Wolfowitz, Paul, here World Values Survey, here Wrangham, Richard, here, here xenophobia, here, here, here, here, here Yahil, Leni, here Yanomami people, here, here Ypres, Battles of, here Zehmisch, Lieutenant Kurt, here Zimbardo, Philip, here, here, here, here, here, here, here, here, here, here, here, here, here Zobrist, Jean-François, here, here A NOTE ON THE AUTHOR Rutger Bregman is one of Europe’s most prominent young historians.

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor
by John Kay
Published 24 May 2004

In Greek and Roman times and in the Middle Ages, business was conducted by individuals, or partnerships of people who knew each other well-who else would take on the risks? When larger partnerships were formed, speculation and fraud followed, and after the South Sea bubble large-scale commercial organization was prohibited. The objective was to restrict investment to ventures the participants might expect to understand. But throughout history, from the tulip mania of 1636 to the dot-com bubble of 1999, greed and gullibility have defeated that purpose. The precursors of the modern corporation were international trading companies, such as the English East India Company or the Dutch VOC. These companies acted as both businesses and governments in the areas they colonized and controlled territories larger than the native countries from which they came.

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Those who invest with Antonio will not be a random sample of the population. Investors will be those who know Antonio or believe they do. Investors, like those telecom shareholders, will be those who are more than averagely optimistic about the prospects for Antonio's trade. In all investment booms-from the tulip mania to the dot-com mania-money is raised cheaply from people who expect high returns but do not in the end receive them. Investment banks have become skilled in managing the issue process so as best to appeal to "irrationalities" in the minds of potential investors-the attraction of "prospects," their aversion to even small losses.

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order
by Paul Vigna and Michael J. Casey
Published 27 Jan 2015

You read the paper every day, and enough stories have appeared to convince you that bitcoin is real, that some entrepreneurs, including the Winklevoss twins of Facebook fame, expect to make a lot of money from it. But the details don’t add up. You get it by doing math problems? No? By having your computer do math problems? How can that possibly work? At this stage, phrases like Ponzi scheme and tulip mania enter your mind. Stage Three: Curiosity. You’ve kept reading. It becomes clear that many people, even some seemingly sensible people such as Internet pioneer Marc Andreessen, people with a track record for being right about this stuff, are genuinely excited by it. But why all the fuss? Okay, it’s digital money, it may work, but what difference is that going to make to regular people?

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A positive feedback loop is how Silicon Valley would describe it, with the higher prices begetting more interest in cryptocurrencies, more investment capital flowing into bitcoin, more innovation and more interest and benefits for the sector, which should push the price even higher. Skeptics could equally call it a bubble—and many sought to do so once the price retreated below $500 in the first half of 2014, using it to justify their depictions of “tulip mania” around bitcoin. But even at those newly lower levels, bitcoin was still higher than any level it had held in its entire history before mid-November 2013. That’s left many miners, bitcoin entrepreneurs, and businesses that have earned the cryptocurrency for a year or more markedly wealthier. The choices they make in investing that wealth have encouraged still more innovation in the sector and have driven prices for bitcoin-related digital properties higher, much as the NASDAQ stock boom fueled the mania for IT start-ups and stocks in the late 1990s.

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History
by Diana B. Henriques
Published 18 Sep 2017

Most previous crashes, including 1929, essentially resembled one another, from the Dutch tulip bulb mania in the late 1600s, to the collapse of London’s South Sea Company in the early eighteenth century, to the “air pocket” drop that shook the U.S. stock market in late May 1962. Black Monday was a new kind of crisis, involving new players and new financial products never before involved in a stock market crash. Today’s most dangerous crises, the ones that threaten the very survival of the financial system, are not modern-dress reenactments of the “tulip mania” bubble in old Amsterdam. They are warp-speed flashbacks to Black Monday. * * * TO CALL THE events that unfold in this book “the stock market crash of 1987” is a misnomer. The crash wasn’t limited to the stock market, and it didn’t erupt suddenly on Monday, October 19. To fully understand the causes and consequences of that devastating day, we have to begin the story nearly eight years earlier, in the first months of 1980, when Jimmy Carter was in the White House, powerful computer-driven investment strategies were a mystery to most of Wall Street, and politicians and bureaucrats had an unshakable faith in rigid regulatory borders.

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Dow Jones Industrial Average (DJIA) Bendix and Black Monday and drop of 1929 and drop of 1968 drop of 1981 drop of 1985 drop of 1986 financial futures and futures price vs. stock market floor gyrations of 1983 Lehman Brothers collapse and MMI and program trading and Silver Thursday and size of, in 1987 summer of 1982 and witching hours and Dow Jones newswire Drexel and Company Drexel Burnham Lambert Drysdale Government Securities Dun’s Review Dutch tulip mania dynamic asset allocation efficient market hypothesis E.F. Hutton and Co. elections of 1980 of 1984 of 1988 electronic markets Ellis, Hayne endowments Energy Department English, Glenn Environmental Protection Agency (EPA) ESM Government Securities Eurodollars Euromoney Farm Belt farm commodity futures federal budget deficits Federal Bureau of Investigation (FBI) Federal Deposit Insurance Corporation (FDIC) caps on payoffs Continental Illinois and First Chicago and First Options and Glass-Steagall and Isaac resigns Penn Square and S&L crisis and state-chartered banks securities underwriting and Federal Home Loan Bank Board Federal Open Market Committee (FOMC) Federal Register Federal Reserve aftermath of 1987 and bank regulation by Black Monday and Brady Report and Continental Illinois and crisis team and Drysdale default and financial futures and foreign currency markets and Glass-Steagall and Greenspan heads interest rates and Lehman Brothers collapse and Mexican debt crisis and Ohio S&L crisis and Penn Square crisis and President’s Working Group and Silver Thursday and state-chartered banks and securities underwriting and Treasury securities market and unified market and need to harmonize regulations among Chicago, New York, etc.

Start It Up: Why Running Your Own Business Is Easier Than You Think
by Luke Johnson
Published 31 Aug 2011

In particular, you should consider your options before jumping onto bandwagon businesses. To that end I can recommend Devil Take the Hindmost by Edward Chancellor (Macmillan, 2000), for its fine introduction to the subject of wild booms and busts through the ages. The author is an ex-Lazard merchant banker who understands his material. His book covers a grand sweep from the Dutch tulip-mania of the 1630s to the Japanese bubble economy of the 1980s. It shows that when it comes to making investments, we are doomed to endlessly repeat our mistakes. Every era brings forth innovations, which offer great reward and attract risk capital. The substantial initial profits encourage a rush of capital and company valuations get out of control.

End the Fed
by Ron Paul
Published 5 Feb 2011

Businesses fail, homes are foreclosed upon, and people bail out of stocks or whatever is the fashionable investment of the day. That phony money creates a false boom is not an unknown fact in history. Thomas Paine observed in the late eighteenth century that paper money threatened to turn the country into a nation of “stockjobbers.” In fact, this can even happen when the money is not paper. The famous case of tulip mania in the Dutch golden era was driven by gold inflows from around Europe after the government gave a massive coinage subsidy to all comers. 13 International markets complicate the picture by allowing the boom phase of the cycle to continue longer than it otherwise would, as foreigners buy up and hold new debt, using it as collateral for their own monetary extensions.

In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest
by Andrew W. Lo and Stephen R. Foerster
Published 16 Aug 2021

“John Law: Innovating Theorist and Policymaker.” In The Origins of Value: The Financial Innovations That Created Modern Capital Markets, ed. William N. Goetzmann and K. Geert Rouwenhorst, 225–38. Oxford, UK: Oxford University Press. Narron, James, and David Skeie. 2013. “Crisis Chronicles: Tulip Mania, 1633–37.” Ritholz, September 22, https://ritholtz.com/2013/09/crisis-chronicles-tulip-mania-1633-37/. Nath, Virendra. 2015. Out of Aces? Fifty Steps to Financial Acuity. Bloomington, IN: Xlibris. Neal, Larry. 2005. “Venture Shares and the Dutch East India Company.” In The Origins of Value: The Financial Innovations That Created Modern Capital Markets, ed.

London Review of Books
by London Review of Books
Published 14 Dec 2017

What is more significant is that much, probably most, of the very expensive and almost invariably huge contemporary art sold today does not go on display in the houses of its purchasers but into storage, or is lent to a museum. Contemporary pieces are also bought as investments, more than has ever previously been the case; they are deemed to constitute a secure ‘alternative asset class’. A little knowledge of auction records (not to mention the 17th-century tulip mania) and of the history of artistic reputations should inspire caution. Hook describes with some bemusement the case of Monticelli, a painter hugely admired around 1900, not only by dealers and collectors but also by Van Gogh, but almost forgotten today. He doesn’t encourage us to dwell on this or on the very many other such cases, but one need only look at the forgotten painters promoted by the ‘visionary’ Durand-Ruel, or indeed by Peggy Guggenheim, or flick through the advertisements in Artforum in recent decades.

Company: A Short History of a Revolutionary Idea
by John Micklethwait and Adrian Wooldridge
Published 4 Mar 2003

The VOC’s charter also explicitly told investors that they had limited liability. Dutch investors were the first to trade their shares at a regular stock exchange, founded in 1611, just around the corner from the VOC’s office. All the Amsterdam hub needed to prove its capitalistic credentials was a market crash, which duly arrived with tulip mania in 1636–1637. If the Dutch set the fashion for stock-market speculation at home, they also set the tone for competitive imperialism abroad. The VOC’s first voyage had the simple instructions: “Attack the Spanish and Portuguese wherever you find them.” Within forty years, the VOC had established itself as the dominant force in the Moluccan Spice Islands, driving the Portuguese away and forcing the English to concentrate on India.

Trend Commandments: Trading for Exceptional Returns
by Michael W. Covel
Published 14 Jun 2011

And the riskier trades get, the more the brain craves them.” “Social conformity drives human beings. Even if the group is wrong, people go along.” Sounds about right, right? Consider the question: Does raw human emotion dictate financial decisions, or are we rational calculators of our self-interest? At the peak of tulip mania in Holland, in February 1637, single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman.2 The idea that we behave irrationally when it comes to money may not seem radical, but it challenges the dominant University of Chicago economic philosophy that has framed business and government for fifty years.

Boomerang: Travels in the New Third World
by Michael Lewis
Published 2 Oct 2011

“The Perfect Bubble,” Aliber calls Iceland’s financial rise, and he has the textbook in the works: an updated version of Charles Kindleberger’s 1978 classic, Manias, Panics, and Crashes. Aliber is editing the new edition. In it, Iceland, he decided back in 2006, would now have its own little box, along with the South Sea Bubble and tulip mania—even though Iceland had yet to crash. For him the actual crash was a mere formality. Word spread in Icelandic economic circles that this distinguished professor at Chicago had taken a special interest in Iceland. In May 2008, Aliber was invited by the University of Iceland’s economics department to give a speech.

Damsel in Distressed: My Life in the Golden Age of Hedge Funds
by Dominique Mielle
Published 6 Sep 2021

What I observed, however, is that it had the two ingredients of every financial crisis, plus a couple others that made it the equivalent of a capital markets Molotov cocktail. The first two conditions that you find at the heart of virtually all asset price bubbles are leverage (too much debt) and speculation (too much greed). The Tulip mania of 1637, the first record of a speculative bubble, when prices of tulips in Holland soared and then collapsed for reasons still uncertain today; the Great Depression of 1929; Black Monday in 1987; the dot-com bubble in 2000—they all had the same root causes. One of the oldest books about Wall Street, Reminiscences of a Stock Operator by Edwin Lefèvre, which recounts the life of stock trader Jesse Livermore around 1890 to 1920, said it categorically a hundred years ago: “There is nothing new on Wall Street.

Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition
by Kindleberger, Charles P. and Robert Z., Aliber
Published 9 Aug 2011

Typically at the height of the bubble, sellers had no bulbs, and some (many?) buyers made down-payments, if at all, in kind, that is, in personal possessions or commodities, presumably because they lacked cash. The difference between the value of the down-payment and the negotiated price was personal credit. See N.W. Posthumus, ‘The Tulip Mania in Holland in the Years 1636 and 1637’, Journal of Economic and Business History, vol. 1 (1928–29), reprinted in W.C. Scoville and J.C. LaForce, eds, The Economic Development of Western Europe, vol. 2, The Sixteenth and Seventeenth Centuries (Lexington, Mass.: D.C. Heath, 1969), p. 142; Simon Schama, The Embarrassment of Riches: an Interpretation of Dutch Culture in the Golden Age (Berkeley: University of California Press, 1987), p. 358; Robert P.

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Foxwell, ‘The American Crisis of 1907’, in Papers in Current Finance (London: Macmillan, 1919), pp. 202–3. 6 Euphoria and Paper Wealth 1. Peter M. Garber, ‘Tulipmania’, in Robert P. Flood and Peter M. Garber, Speculative Bubbles, Speculative Attacks, and Policy Switching (Cambridge, Mass.: MIT Press, 1994), p. 72. 2. N.W. Posthumus, ‘The Tulip Mania in Holland in the Years 1636 and 1637’, Journal of Business and Economic History, vol. 1 (1928–29), reprinted in W.C. Scoville and J.C. LaForce, eds, The Economic Development of Western Europe, vol. 2, The Sixteenth and Seventeenth Centuries (Lexington, Mass.: D.C. Heath, 1969), p. 169. 3. Simon Schama, The Embarrassment of Riches: an Interpretation of Dutch Culture in the Golden Age (New York: Knopf, 1987), p. 358.

House of Debt: How They (And You) Caused the Great Recession, and How We Can Prevent It From Happening Again
by Atif Mian and Amir Sufi
Published 11 May 2014

His colleague and Nobel laureate Robert Solow compared Kindleberger to Darwin on the Beagle: “collecting, examining, and classifying interesting specimens . . . it was Kindleberger’s style as an economic historian to hunt for interesting things to learn, not pursue a systematic agenda.”2 The culmination of Kindleberger’s massive data collection on bubbles—Manias, Panics, and Crashes: A History of Financial Crises—is one of the most influential books written in economic history. The book is a tour de force: it covers bubbles going back to the tulip mania in the seventeenth-century Netherlands to the commercial real estate boom before Japan’s “Lost Decade,” to the 1998 financial crisis spurred by the collapse of Long-Term Capital Management. It represents one of the most systematic and large-scale explorations of bubbles and financial crises ever written.

How We Got Here: A Slightly Irreverent History of Technology and Markets
by Andy Kessler
Published 13 Jun 2005

Enron would pull this scam almost 300 years later. England was ripe for manipulation. At the exact same time, thanks to a Brit named John Law, the French were in the midst of their own speculative bubble: The Mississippi Company was worth more than all of the gold and silver in France. The Dutch tulip mania of the 1630’s didn’t quite kill off speculation there. Between the fall of 1719 and the summer of 1720, close to two hundred joint stock companies, many of them purely speculative, went public. As an inducement to Parliament, Blunt offered a fee of 7.5 million pounds back to the Treasury for the rights to do the exchange.

The Rise of the Quants: Marschak, Sharpe, Black, Scholes and Merton
by Colin Read
Published 16 Jul 2012

Call options used by tulip buyers ensured a good price on delivery, and puts could be used to provide sellers with a predictable price for their product upon harvest. While these mechanisms acted at first as a way to ensure predictability for buyers and sellers of tulips, it soon became obvious to speculators that profits could be had. As speculators wrote puts and calls, it would not be long before gyrations in tulip mania caused mismatches in options and delivered prices and quantities that those speculators on the losing end could not cover. Such breakdowns in market-making also created breakdowns in trust in options and in financial markets in general. By the 1600s and 1700s, large global trading companies, such as the South Seas Trading Company, were contributing to an options frenzy on their securities.

The City: A Global History
by Joel Kotkin
Published 1 Jan 2005

By the late seventeenth century, the Dutch were clearly losing their once inimitable boldness and tenacity. Dutch capitalists—like those in Venice before them—now often opted to become rentiers, investors in land and stock, rather than initiate new ventures. Interested primarily in short-term financial gain—epitomized by the famous tulip mania of 1636–1637—the Dutch elites lacked the moral resolve to defend some of their key overseas holdings, most portentously their fledgling colony of New Netherland. One early explorer rightly identified the colony’s settlement at New Amsterdam as “a great natural pier ready to receive the commerce of the world.”

I.O.U.: Why Everyone Owes Everyone and No One Can Pay
by John Lanchester
Published 14 Dec 2009

At the beginning of the new millennium, however, both of them were going through an odd patch. The stock market had undergone a spectacular bubble in Internet and new-economy stocks. Some of what was happening seemed to belong to a classic hysteria equal to that of the great historical bubbles such as the Dutch tulip mania, the South Sea bubble, or the nineteenth-century bubble in railway stocks. The broad rules of these bubbles and implosions are well known. They were first systematized by the economist Hyman Minsky, and their best-known popular formulation is in the classic text by Charles P. Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises.

Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages
by Carlota Pérez
Published 1 Jan 2002

Courtappointed receivers of bankrupted telecommunications companies were recovering an average of less than 10 per cent of the original cost of building the networks when they tried to sell the assets. 156 The cemetery of ‘dot.coms’ after the NASDAQ collapse is another witness to the madness of late-Frenzy. 152. Neither the Tulip mania of the 1630s nor the South Sea Bubble of 1720 qualifies in this particular sense. In fact there are many collective psychology phenomena associated with speculative behavior, but not related to the assimilation of technological revolutions in a capitalist context. There are also many other financial crises in capitalism, following particular episodes of speculation, which have more immediate explanatory factors. 153.

The Money Machine: How the City Works
by Philip Coggan
Published 1 Jul 2009

This ambivalent attitude towards financiers dates back over centuries. Roman emperors and medieval monarchs had to flatter financiers when they needed to borrow money; the attitude quickly turned to revulsion when the time came to pay it back. Whole populations have been caught up in frenzies of speculation dating back from Dutch tulip mania through the South Sea Bubble to the Florida land boom of the 1920s. Individual financiers have found it laughably easy to buy popularity when their schemes were prospering (think of Robert Maxwell). But there have been no shortages of commentators saying ‘I told you so’ when their empires subsequently collapsed.

The Behavioral Investor
by Daniel Crosby
Published 15 Feb 2018

Acknowledging the place of luck should chasten our ego in good times and soften our fall in bad times. And while success through strict obedience to rules is not as sexy as practicing three pointers like an NBA star, it has the potential to be just as rewarding. List of some notable manias, panics and crashes Tulip mania (Netherlands) – 1637 South Sea Bubble (UK) – 1720 Bengal Bubble (UK) – 1769 Credit Crisis of 1772 (UK) Financial Crisis of 1791 (US) Panic of 1796–7 (US) Panic of 1819 (US) Panic of 1825 (UK) Panic of 1837 (US) Panic of 1847 (UK) Panic of 1857 (US) Panic of 1866 (UK) Black Friday (US) – 1869 Paris Bourse crash of 1882 (France) “Encilhamento” (Brazil) – 1890 Panic of 1893 (US) Panic of 1896 (US) Panic of 1901 (US) Panic of 1907 (US) Great Depression (US) – 1929 Recession of 1937–8 (US) Brazilian Market Crash of 1971 British Market Crash of 1973–4 Souk Al-Manakh Crash (Kuwait) – 1982 Black Monday (US) – 1987 Rio de Janeiro Stock Exchange Crash – 1989 Japanese Asset Price Bubble – 1991 Black Wednesday (UK) – 1992 Asian Financial Crisis – 1997 Russian Financial Crisis – 1998 dot.com Bubble (US) – 2000 Chinese Stock Bubble – 2007 Great Recession of 2007–9 (US) European Sovereign Debt Crisis (2010) Flash Crash of 2010 (US) Notes 114 L.

Money Changes Everything: How Finance Made Civilization Possible
by William N. Goetzmann
Published 11 Apr 2016

The criticism of finance as a tool of exploitation on moral grounds goes back to Babylonian times. The discomfort that society has felt with the complexity and abstraction of financial tools has stimulated rich artistic interpretations that in turn shaped cultural attitudes. We sometimes turn to art for a perspective, and artists’ views on finance—from seventeenth-century tulip mania prints to the twentieth-century murals about commerce in New York’s Rockefeller Center—depict finance in the context of familiar cultural symbols. The artist’s vision is an integral part of the narrative of this book. Much of my research in finance has been directed toward a scholarly audience; however, one motivation for writing this book is the hope that a broader audience will be curious about the origins of a toolkit that we all share and a mindset that seems at times difficult and perhaps unnatural.

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Several of the prints in the book hearken back to earlier Dutch art. For example, borrowing freely from Peter Brueghel and Hieronymus Bosch, The Great Mirror of Folly artists portrayed loony investors having the stone of folly extracted from their feverish brains, or as fools doomed to perpetually drift in lunatic reverie. One print of the Dutch tulip mania of the 1630s is simply reproduced in the volume to draw the direct analogy between the episode of bulb speculation and the great financial crash. The bulb print is a figure of a giant, empty cap—suggesting the loss of the head and mind to speculative passions. FIGURE 24. Engraving from The Great Mirror of Folly, 1720, depicting the global market bubble on its path from the coffeehouse, pulled by the six great companies.

Flash Crash: A Trading Savant, a Global Manhunt, and the Most Mysterious Market Crash in History
by Liam Vaughan
Published 11 May 2020

Goldberg gruffly explained the nuts and bolts of placing and canceling trades using the trading software. Paolo regaled the group with war stories. They learned how to read charts and gauge market profile, and discussed the importance of psychology by examining the crowd effect, the history of various market crashes, and seventeenth-century Holland’s tulip mania. During the training period, the rookies were paid £500 (around $800 at the time) a month, a large chunk of which was taken up just making their way to the hinterland of Weybridge. To make ends meet, they waited for sandwiches to be discounted in the Waitrose downstairs and ate them in the vacant office next door.

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit
by William Keegan
Published 24 Jan 2019

Canada’s experience was the exception to the rule that, in a globalised financial world, with sub-prime ‘paper’ turning up on bank balance sheets all over Europe, it was difficult to avoid being tainted by the crisis. For a time, it was fashionable to blame financial engineering for the banking crisis but in Thucydidean terms the truest cause could well have been a recrudescence of the historical pattern of greed and excessive risk-taking – parallels with the Dutch tulip mania and South Sea Bubble – to relieve so many people of their senses. But the assumed sophistication of the global financial system was the proximate cause and was to magnify the effects. The general atmosphere was epitomised by the slogan ‘This time it’s different’ – an indication of the human propensity not to learn from history.

Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us
by Dan Lyons
Published 22 Oct 2018

So they fly out and have drinks at the Rosewood Hotel on Sand Hill Road in Menlo Park, where venture capitalists hang around, as do expensive “companions,” many with Eastern European accents. They eat lunch at the Battery, a members-only private club for social-climbing parvenus in San Francisco. They wangle an invitation to a Bitcoin party and rub shoulders with the scammers, hustlers, Ponzi schemers, and obnoxious knobs who are trying to cash in on a modern-day tulip mania based around a cryptocurrency that Warren Buffett describes as “rat poison squared.” Buffett’s partner, Charlie Munger, was even less polite about Bitcoin mania: “It’s like somebody else is trading turds and you decide you can’t be left out.” The problem is that when you dig through the bullshit you discover, as Gertrude Stein once said about Oakland, that “there is no there there.”

The Greed Merchants: How the Investment Banks Exploited the System
by Philip Augar
Published 20 Apr 2005

Market strategists prefer fundamental explanations for the bubble such as the information technology revolution, complacency amongst investors following the twenty-year bull market, confidence arising from the apparently permanent benign economic conditions and the surfeit of cash looking for places to invest. Behavioural finance experts favour psychological interpretations of the mass hysteria that at times threatened to overrun markets. Historians look for context to explain recent events, turning for parallels to previous examples of markets overshooting such as the seventeenth-century Dutch tulip mania, the South Sea Bubble in the eighteenth century and the Roaring Twenties. Defenders of the free market have been quick to use these explanations to deflect criticism from the system and the institutions they believe in. Prominent figures such as Alan Greenspan have qualified their criticism of corporate excess by saying that the nineties saw no increase in human greed, just an increase in the opportunities to be greedy resulting from economic growth.

Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley
by Corey Pein
Published 23 Apr 2018

The causes are complex but the result is evident: Silicon Valley simply isn’t making unicorns like it did a few years ago. Crucially, though, this most recent bubble didn’t collapse suddenly and with a loud bang, as with the 2000 dot-com fiasco. Rather, the surface of the bubble solidified like a cocoon. What looked like another absurd example of American excess, a high-tech tulip mania, was actually a glimpse at something much more remarkable: a fundamental economic transformation, much like the one brought about by the 2008 financial crisis. The Wall Street bailouts elicited by that crisis rendered the U.S. government subservient to capital in ways not seen since the Great Depression, but the Web 2.0 unicorns pulled off a subtler, and potentially more consequential exploit by turning their ostensible customers into a source of invaluable data as well as free labor.

Supertall: How the World's Tallest Buildings Are Reshaping Our Cities and Our Lives
by Stefan Al
Published 11 Apr 2022

City officials made tree-covered city walls accessible to people as a shaded backdrop for socialization and mingling. Trees were planted inside cities and in spectacular gardens, most famously in Versailles. Here, rows of pines, elms, and fruit trees lined avenues called allées. They stood beside exuberant beds of flowers—some of which were in so much demand that this led to the Dutch tulip mania in 1637, the world’s first speculative bubble. During this time, Amsterdam became known as a city with abundant tree-lined canals. This sight astonished visitors; the British diarist John Evelyn described Amsterdam as “a City in a Wood”: “Nothing can be more pleasing, especially being so frequently planted and shaded with the beautiful lime-trees, set in rows before every man’s house.”

Uncomfortably Off: Why the Top 10% of Earners Should Care About Inequality
by Marcos González Hernando and Gerry Mitchell
Published 23 May 2023

Even though they are virtual, they rely on physical resources and are astonishingly harmful to the environment: the carbon footprint needed to produce these goods has been compared to the emissions of mid-sized countries.59 They rely on eager advocates to stimulate their demand, and are prone to create economic bubbles. Many investors have lost their life savings on the off-chance they’d see them multiplied by tenor a hundred-fold off the back of other investors’ eagerness. They are, in many ways, the 21st‑century version of the tulip mania, but tulips at least are tangible (and beautiful). Cryptocurrencies and NFTs are symptoms of awareness by those who trade them: that wealth and speculation drive economic outcomes much more strongly than wages and that 143 Uncomfortably Off early market access is everything. They are also predicated on an implicit libertarian philosophy that has only contempt for the welfare state: part of the reason cryptocurrencies and NFTs exist in the first place is to make taxation and central banking obsolete.

Debt: The First 5,000 Years
by David Graeber
Published 1 Jan 2010

True, Locke’s materialism also came to be broadly accepted—even to be the watchword of the age.83 Mainly, though, the reliance on gold and silver seemed to provide the only check on the dangers involved with the new forms of credit-money, which multiplied very quickly—especially once ordinary banks were allowed to create money too. It soon became apparent that financial speculation, unmoored from any legal or community constraints, was capable of producing results that seemed to verge on insanity. The Dutch Republic, which pioneered the development of stock markets, had already experienced this in the tulip mania of 1637—the first of a series of speculative “bubbles,” as they came to be known, in which future prices would first be bid through the ceiling by investors and then collapse. A whole series of such bubbles hit the London markets in the 1690s, in almost every case built around a new joint-stock corporation formed, in imitation of the East India Company, around some prospective colonial venture.

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On the other hand, it does seem that the moment a significant portion of the population begins to actually believe this, and particularly, starts treating credit institutions as if they really will be around forever, everything goes haywire. Note here how it was the most sober, cautious, responsible capitalist regimes—the seventeenth-century Dutch Republic, the eighteenth-century British Commonwealth—the ones most careful about managing their public debt—that saw the most bizarre explosions of speculative frenzy, the tulip manias and South Sea bubbles. Much of this seems to turn on the nature of national deficits and credit money. The national debt is, as politicians have complained practically since these things first appeared, money borrowed from future generations. Still, the effects have always been strangely double-edged.

Debunking Economics - Revised, Expanded and Integrated Edition: The Naked Emperor Dethroned?
by Steve Keen
Published 21 Sep 2011

But Bentham’s more important sleight of mind was to ignore the macroeconomic argument that the legislative ceiling to the rate of interest improved the overall quality of investment by favoring ‘sober people’ over ‘prodigals and projectors.’ The historical record favored Smith. The seventeenth, eighteenth and nineteenth centuries are awash with examples of projectors promoting fantastic schemes to a gullible public. The most famous have entered the folklore of society: the Tulip Mania, the South Sea Bubble, the Mississippi Land Scheme (Mackay 1841). What has not sunk in so deeply is that the financial panics that occurred when these bubbles burst frequently ruined whole countries.6 However, the tide of social change and the development of economic theory favored Bentham. The statutes setting maximum rates were eventually repealed, the concept of usury itself came to be regarded as one of those quaint preoccupations of a more religious age, and modern economics extended Bentham’s concept that ‘putting money out at interest, is exchanging present money for future’ (Bentham 1787).

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straight lines, in economic analysis subprime bubble substitution effects Summers, Larry supply and demand; analysis of; backward-bending, in labor market; independence of; laws of; of labor; setting of price supply curves; non-existence of; of labor; theory of surplus, production of surplus value, origins of Swan, Trevor Sweezy, Paul, The Theory of Capitalist Development Systems Engineering Approach Taleb, Nassim tatonnement (groping) Taylor Rule Taylor, John Thatcher, Margaret thermodynamics third agent Thornton, Henry time: concept of; economists’ treatment of; factor omitted; importance of time constants time discount; rate of time value: of goods; of money total differential of profit trade unions; economists’ view of; laws against; non-unionization of economists transformation problem transitivity Tsallis-statistics Tulip Mania Turing, Alan turnover: of money; periods of uncertainty; Keynes and Undercover Economist, The unemployment; definitions of; relation to wage increases see also inflation, relation to unemployment unexplored conditions unions see trade unions United States of America (USA); debt deflation in; economic boom in; economic future of; economy of (insolvency of); idle industrial capacity in; industrialization in; leveraging in; money supply in; power of finance sector in; shadow banking in; unemployment definition in use-value; in Marx usury util utilitarianism utility; cardinal; concept of; expected; immeasurable; marginal (diminishing); maximization of; ordinal; perceived; ratio of; social; subjective value; relation to price; source of; theory of; transition to price see also labor theory of value value at risk formulas Varian, Hal; Microeconomic Analysis Veblen, Thorstein velocity of money Vensim program Vissim program Volcker, Paul wages; determination of (theory of); minimum wages; relation to unemployment Wagner, Adolph Wallace, Neil Walras, L.; Elements of Pure Economics; view of equilibrium Walras’s Law; fallacy of weather, modeling of Weintraub, Sidney welfare state well-being, social Wellstone, Paul Wheelwright, Ted Williams, John Woodford, M.

The End of Theory: Financial Crises, the Failure of Economics, and the Sweep of Human Interaction
by Richard Bookstaber
Published 1 May 2017

I will argue that these are the reasons for using agent-based models, models that allow for individuals who are each plotting their own course, making adjustments along the way, and affecting the world and others through their actions. Agent-based models do this by applying the simulation approach that is rooted in the analysis of complex and adaptive systems. These are models that respect our very human limits. Let me summarize four broad phenomena that are endemic to financial crises as they have been evolving since the tulip mania of seventeenth-century Holland. I will treat these in more detail in chapters 3 through 6. 1. Emergent phenomena. You’re cruising along the highway when traffic jams up, and you wonder: Is there an accident up ahead? Or maybe road repair? Then, five minutes and a mile later, you’re again moving along smoothly without any obvious reason for the jam.

Disrupted: My Misadventure in the Start-Up Bubble
by Dan Lyons
Published 4 Apr 2016

I wasn’t sure whether to resent them or envy them. In the end I felt a bit of both. Of course the dotcom bubble finally blew up, and I felt a little bit vindicated and even a bit relieved. Now everything could go back to normal. I figured the dotcom bubble had been a historical anomaly akin to the Dutch tulip mania of the seventeenth century, something we would never see again in our lifetime. Instead another one is taking shape. People my age, who remember the first dotcom bubble, are walking around San Francisco feeling like the character played by Bill Murray in Groundhog Day. We’ve lived through this before.

Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy
by George Gilder
Published 16 Jul 2018

If bitcoin matched gold’s higher historical growth rate of 2.5 percent, it would reach 347,119,614 units. As Kendall concludes, the limit of 21 million total bitcoin units “is highly deflationary over time and unworkable.” If people believe in the scheme, most of the world’s wealth might flow to bitcoin in periodic buying panics like the tulip mania, South Sea Bubble, and other derangements catalogued in 1841 by Charles Mackay in Extraordinary Popular Delusions and the Madness of Crowds.9 This outcome might be gratifying to current bitcoin holders, but it would obviously lead to government interventions, confiscations, crashes, and other reactions that would end this otherwise redemptive human project.

The Orchid Thief: A True Story of Beauty and Obsession
by Susan Orlean
Published 1 Jan 1998

So many new varieties were being found every day that no collector could ever rest—orchids were an endless preoccupation. Once the vogue for orchids began, the prices paid for the plants, the measures taken to obtain them, and the importance attached to them took on an air of madness. This Victorian obsession, this “or-chidelirium,” was a rapacious desire. In intensity, it was similar to the Dutch tulip mania of the 1630s, which reached its zenith in 1637, when the rights to a tulip bulb named Viceroy were sold at auction for a farm’s worth of valuable goods including six loads of grain, four oxen, eight hogs, twelve sheep, wine, beer, and a thousand pounds of cheese. The most valued tulips were those with brilliant streaks and stripes of colors, then thought to be the mark of distinction, and now known by botanists to be the evidence of a devastating flower virus spread by aphids.

The Globalization Paradox: Democracy and the Future of the World Economy
by Dani Rodrik
Published 23 Dec 2010

But some of the key conclusions are not hard to foresee: markets are prone to bubbles, unregulated leverage creates systemic risk, lack of transparency undermines confidence, and early intervention is crucial when financial markets are going belly-up. Didn’t we know all this from as long ago as the famous tulip mania of the seventeenth century? These crises transpired not because they were unpredictable but because they were unpredicted. Economists (and those who listen to them) had become overconfident in their preferred narrative of the moment: markets are efficient, financial innovation transfers risk to those best able to bear it, self-regulation works best, and government intervention is ineffective and harmful.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

See Troubled Assets Relief Program tax cuts, 18, 86, 169 Taylor, John, 178n5 Tennessee, 165 Term Asset-Backed Loan Facility (TALF), 91–92, 93, 94, 95 Term Auction Facility (TAF), 90–91 Texas, 32, 141, 165 Texas hold ’em poker, 40 Texas Railroad Commission, 141 Thaler, Richard, 21, 120, 121, 124, 180n4,6, 191n3,4,9, 193n6 Thatcher, Margaret, xxv, 172, 175 Thernstrom, Abigail, 164, 197n16 Thernstrom, Stephan, 164, 197n16 Thiessen, Gordon, 115 Thomas, Landon, Jr., 186n13 Thought experiments, 2, 3, 5, 117 Times of London, 71 Tinbergen, Jan, 16, 179n8 Tirole, Jean, 196n14 Tobacman, Jeremy, 192n13,25 Tobias, Ronald, 52, 53, 184n7 Tobin, James, 46, 145, 178n4, 183n11, 189n1, 194n34 Tobin’s q, 145, 195n36,37 Toyota Motor Company, 137–40 Traité de l’Homme (Descartes), 178n3 Trajectory of metal ball experiment, 151 Treasury bills, 79, 91–92 Treasury Department, U.S., 46, 91 Treyer, Valerie, 181n9 Trondheim, Norway, 11, 13 Troubled Assets Relief Program (TARP), 91, 92, 94 Trust Indenture Act of 1939, 39 Tuccillo, John, 149–50, 195n3 Tulip mania, 13 Turner, Frederic Jackson, 62, 184n9 Tversky, Amos, 190n13, 191n4 Two-target approach, 18, 95–96 Uccello, Cori E., 192n14 Uchitelle, Louis, 189n15 Ueda, Kazuo, 183n14 uncertainty, 144, 194n32 unemployment, xxi–xxiii, 6, 97–106, 174, 188–89n1–17; classical economics on, 2–3; current rate of, 3; in the depression of the 1890s, 60; efficiency wage theory on (see efficiency wage theory); in the Great Depression, xxi–xxii, 2, 3, 67; inflation and (see inflation-unemployment tradeoff); involuntary, xxiii, xxv, 97–100; in minorities, 157, 158, 163; natural rate of (see natural rate theory); in New Classical Economics, xxv; quits and, 103–4, 106; recent rise in, 4; voluntary, 2 unions.

Value Investing: From Graham to Buffett and Beyond
by Bruce C. N. Greenwald , Judd Kahn , Paul D. Sonkin and Michael van Biema
Published 26 Jan 2004

Even those whose long-term performance records were the stuff of legend fell behind those who either understood the New Economy or, more likely, were able to anticipate how other investors would respond to its prospects. At the end of the decade (and century and millennium), the debate between those who saw the current market level as tulip mania revisited and those who saw it as a stepping stone to 36,000 on the Dow was still raging. It has diminished, at least for the moment, as the year 2000 reminded investors that everything that rises may not rise forever. Like most value investors, we do not put much credence in predictions about the market-our own included.

The Infinite Machine: How an Army of Crypto-Hackers Is Building the Next Internet With Ethereum
by Camila Russo
Published 13 Jul 2020

Richard Turnill, formerly chief investment strategist at BlackRock, the world’s largest asset manager, said in an interview, “I look at the charts, and to me that looks pretty scary.” Stock market analyst Elliott Prechter said in his newsletter, “The price activity and manic sentiment that led to present prices have dwarfed even the Tulip mania of nearly 400 years ago,” and that most altcoins are no more than “high-tech, pump-and-dump schemes.” Howard Marks, billionaire investor and Oaktree Capital cofounder, wrote in a letter to investors that “digital currencies are nothing but an unfounded fad (or perhaps even a pyramid scheme).” For one headline writer at The Economist the question wasn’t whether crypto was in a bubble, the question was, “What If the Bitcoin Bubble Bursts?”

A New History of the Future in 100 Objects: A Fiction
by Adrian Hon
Published 5 Oct 2020

OAIDs, of course, caused considerable problems of their own and are still to this day not completely integrated with state-run defense safety networks. 84    THE BRAIN BUBBLE Earth, 2053 Take a flask. Pour in a large volume of humans, top it up with a generous helping of market demand, and sprinkle a dash of innovation from above. Mix thoroughly. What do you get? Bubbles. This is the story of the brain bubble. Like all bubbles—tulip mania, the South Sea bubble, the Internet bubble—the brain bubble began with a new product that fulfilled a genuine human demand in an innovative way: the neural lace. And like all bubbles, the value of that product became unmoored from reality, sailing far beyond its intrinsic value, blown along by irrational exuberance from speculators, and ultimately—inevitably—sinking to the depths with great drama and no small amount of acrimony.

The End of Growth: Adapting to Our New Economic Reality
by Richard Heinberg
Published 1 Jun 2011

You are also likely to be constantly on the lookout for information — even rumors — that could tip you off to impending price swings in particular stocks. When lots of people engage in speculative investment, the likely result is a series of occasional manias or bubbles. A classic example is the 17th-century Dutch tulip mania, when trade in tulip bulbs assumed bubble proportions; at its peak in early February 1637, some single tulip bulbs sold for more than ten times the annual income of a skilled craftsman.17 Just days after the peak, tulip bulb contract prices collapsed and speculative tulip trading virtually ceased.

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity
by Joseph E. Stiglitz
Published 28 Jan 2020

And no government ever has wasted resources on the scale of the private financial system, for instance, in the case of the United States during the run-up to the financial crisis. During this time, homes financed through unaffordable mortgages birthed a real estate bubble. European finance got in on the action by buying securities backed by those loans. The long series of real estate and other bubbles, dating back to the Dutch tulip mania of the seventeenth century, testifies to the extensive history of private financial sector misallocation of scarce resources in faddish, boom-and-bust cycles. Of course, all human institutions are fallible. We seek to learn how to be more productive, to identify waste when we see it, and then cut it out.

Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money
by Nathaniel Popper
Published 18 May 2015

“I think when they dig up our society, all Planet of Apes–style, in a couple of centuries, Bitcoin is probably going to have had a greater impact on the world than Urban Outfitters. We’re still in early days.” Many bankers, economists, and government officials dismissed the Bitcoin fanatics as naive promoters of a speculative frenzy not unlike the Dutch tulip mania four centuries earlier. On several occasions, the Bitcoin story bore out the warnings of the critics, illustrating the dangers involved in moving toward a more digitized world with no central authority. Just a few weeks before Morehead’s gathering, the largest Bitcoin company in the world, the exchange known as Mt.

The Economics of Enough: How to Run the Economy as if the Future Matters
by Diane Coyle
Published 21 Feb 2011

Majorities of people in many countries do not believe, at present, that markets are doing a good job of organizing the economy. The immediate crisis is probably the least interesting way in which markets are failing at the moment, however. Financial crises do indeed recur in market economies, at least as far back as the tulip mania of the seventeenth century.17 The economist Hyman Minsky has argued that there is an internal cycle of capitalism that guarantees there will be banking crises from time to time.18 There have been a few in recent decades—in 1993–94, 1997–98, in 2001, as well as 2007–8. Each one is different, and the most recent crisis has been distinctive in involving the world’s very biggest banks.

Loonshots: How to Nurture the Crazy Ideas That Win Wars, Cure Diseases, and Transform Industries
by Safi Bahcall
Published 19 Mar 2019

Most researchers tried to solve the fat tail problem by studying the behavior of individual traders. Johnson, instead, looked at clusters. He asked what would happen if we assumed traders acted in cliques: small groups whose members all behave the same way, that is, they make the same buy or sell decisions. (The evidence for groupthink in markets, from tulip mania to the internet bubble, is strong.) The clusters need not be permanent. Just like cliques in high school, members come and go, trading cliques form and dissolve, they merge with other cliques or split into two. Imagine bringing a pot of water to a boil. Just before the boiling point, bubbles of gas appear.

The End of Wall Street
by Roger Lowenstein
Published 15 Jan 2010

In such cases—as in the late ’90s, when fundamentally worthless Internet stocks claimed valuations of tens of billions of dollars; or in the 1630s in Holland when, at the peak of a mania, twelve acres of land were offered for a single bulb of Semper Augustus tulip—prices are floated on sheer froth.10 During the tulip mania, Dutch traders met at taverns and contracted for the future delivery of bulbs of a flower regarded as a luxury and a status symbol. Precipitously, the bubble collapsed, and tulips once more were merely tulips. The question posed about bubbly markets has been the same ever since: What is the real price, or the price justified by supply and demand?

Other People's Money: Masters of the Universe or Servants of the People?
by John Kay
Published 2 Sep 2015

.: Hyperion 220 Loomis, Carol 108 lotteries 65, 66, 68, 72 Lucas, Robert 40 Lynch, Dennios 108 Lynch, Peter 108, 109 M M-Pesa 186 Maastricht Treaty (1993) 243, 250 McCardie, Sir Henry 83, 84, 282, 284 McGowan, Harry 45 Machiavelli, Niccolò 224 McKinley, William 44 McKinsey 115, 126 Macy’s department store 46 Madoff, Bernard 29, 118, 131, 132, 177, 232, 293 Madoff Securities 177 Magnus, King of Sweden 196 Manhattan Island, New York: and Native American sellers 59, 63 Manne, Henry 46 manufacturing companies, rise of 45 Marconi 48 marine insurance 62, 63 mark-to-market accounting 126, 128–9, 320n22 mark-to-model approach 128–9, 320n21 Market Abuse Directive (MAD) 226 market economy 4, 281, 302, 308 ‘market for corporate control, the’ 46 market risk 97, 98, 177, 192 market-makers 25, 28, 30, 31 market-making 49, 109, 118, 136 Markets in Financial Instruments Directive (MIFID) 226 Markkula, Mike 162, 166, 167 Markopolos, Harry 232 Markowitz, Harry 69 Markowitz model of portfolio allocation 68–9 Martin, Felix 323n5 martingale 130, 131, 136, 139, 190 Marx, Groucho 252 Marx, Karl 144, 145 Capital 143 Mary Poppins (film) 11, 12 MasterCard 186 Masters, Brooke 120 maturity transformation 88, 92 Maxwell, Robert 197, 201 Mayan civilisation 277 Meade, James 263 Means, Gardiner 51 Meeker, Mary 40, 167 Melamed, Leo 19 Mercedes 170 merchant banks 25, 30, 33 Meriwether, John 110, 134 Merkel, Angela 231 Merrill Lynch 135, 199, 293, 300 Merton, Robert 110 Metronet 159 Meyer, André 205 MGM 33 Microsoft 29, 167 middleman, role of the 80–87 agency and trading 82–3 analysts 86 bad intermediaries 81–2 from agency to trading 84–5 identifying goods and services required 80, 81 logistics 80, 81 services from financial intermediaries 80–81 supply chain 80, 81 transparency 84 ‘wisdom of crowds’ 86–7 Midland Bank 24 Milken, Michael 46, 292 ‘millennium bug’ 40 Miller, Bill 108, 109 Minuit, Peter 59, 63 Mises, Ludwig von 225 Mittelstand (medium-size business sector) 52, 168, 169, 170, 171, 172 mobile banking apps 181 mobile phone payment transfers 186–7 Modigliani-Miller theorem 318n9 monetarism 241 monetary economics 5 monetary policy 241, 243, 245, 246 money creation 88 money market fund 120–21 Moneyball phenomenon 165 monopolies 45 Monte Carlo casino 123 Monte dei Paschi Bank of Siena 24 Montgomery Securities 167 Moody’s rating agency 21, 248, 249, 313n6 moral hazard 74, 75, 76, 92, 95, 256, 258 Morgan, J.P. 44, 166, 291 Morgan Stanley 25, 40, 130, 135, 167, 268 Morgenthau, District Attorney Robert 232–3 mortality tables 256 mortgage banks 27 mortgage market fluctuation in mortgage costs 148 mechanised assessment 84–5 mortgage-backed securities 20, 21, 40, 85, 90, 100, 128, 130, 150, 151, 152, 168, 176–7, 284 synthetic 152 Mozilo, Angelo 150, 152, 154, 293 MSCI World Bank Index 135 muckraking 44, 54–5, 79 ‘mugus’ 118, 260 multinational companies, and diversification 96–7 Munger, Charlie 127 Munich, Germany 62 Munich Re 62 Musk, Elon 168 mutual funds 27, 108, 202, 206 mutual societies 30 mutualisation 79 mutuality 124, 213 ‘My Way’ (song) 72 N Napoleon Bonaparte 26 Napster 185 NASA 276 NASDAQ 29, 108, 161 National Economic Council (US) 5, 58 National Employment Savings Trust (NEST) 255 National Institutes of Health 167 National Insurance Fund (UK) 254 National Provincial Bank 24 National Science Foundation 167 National Westminster Bank 24, 34 Nationwide 151 Native Americans 59, 63 Nazis 219, 221 neo-liberal economic policies 39, 301 Netjets 107 Netscape 40 Neue Markt 170 New Deal 225 ‘new economy’ bubble (1999) 23, 34, 40, 42, 98, 132, 167, 199, 232, 280 new issue market 112–13 New Orleans, Louisiana: Hurricane Katrina disaster (2005) 79 New Testament 76 New York Stock Exchange 26–7, 28, 29, 31, 49, 292 New York Times 283 News of the World 292, 295 Newton, Isaac 35, 132, 313n18 Niederhoffer, Victor 109 NINJAs (no income, no job, no assets) 222 Nixon, Richard 36 ‘no arbitrage’ condition 69 non-price competition 112, 219 Norman, Montagu 253 Northern Rock 89, 90–91, 92, 150, 152 Norwegian sovereign wealth fund 161, 253 Nostradamus 274 O Obama, Barack 5, 58, 77, 194, 271, 301 ‘Obamacare’ 77 Occidental Petroleum 63 Occupy movement 52, 54, 312n2 ‘Occupy Wall Street’ slogan 305 off-balance-sheet financing 153, 158, 160, 210, 250 Office of Thrift Supervision 152–3 oil shock (1973–4) 14, 36–7, 89 Old Testament 75–6 oligarchy 269, 302–3, 305 oligopoly 118, 188 Olney, Richard 233, 237, 270 open market operations 244 options 19, 22 Organisation for Economic Co-operation and Development (OECD) 263 Osborne, George 328n19 ‘out of the money option’ 102, 103 Overend, Gurney & Co. 31 overseas assets and liabilities 179–80, 179 owner-managed businesses 30 ox parable xi-xii Oxford University 12 P Pacific Gas and Electric 246 Pan Am 238 Paris financial centre 26 Parliamentary Commission on Banking Standards 295 partnerships 30, 49, 50, 234 limited liability 313n14 Partnoy, Frank 268 passive funds 99, 212 passive management 207, 209, 212 Patek Philippe 195, 196 Paulson, Hank 300 Paulson, John 64, 109, 115, 152, 191, 284 ‘payment in kind’ securities 131 payment protection policies 198 payments system 6, 7, 25, 180, 181–8, 247, 259–60, 281, 297, 306 PayPal 167, 168, 187 Pecora, Ferdinand 25 Pecora hearings (1932–34) 218 peer-to-peer lending 81 pension funds 29, 98, 175, 177, 197, 199, 200, 201, 208, 213, 254, 282, 284 pension provision 78, 253–6 pension rights 53, 178 Perkins, Charles 233 perpetual inventory method 321n4 Perrow, Charles 278, 279 personal financial management 6, 7 personal liability 296 ‘petrodollars’ 14, 37 Pfizer 96 Pierpoint Morgan, J. 165 Piper Alpha oil rig disaster (1987) 63 Ponzi, Charles 131, 132 Ponzi schemes 131, 132, 136, 201 pooled investment funds 197 portfolio insurance 38 Potts, Robin, QC 61, 63, 72, 119, 193 PPI, mis-selling of 296 Prebble, Lucy: ENRON 126 price competition 112, 219 price discovery 226 price mechanism 92 Prince, Chuck 34 private equity 27, 98, 166, 210 managers 210, 289 private insurance 76, 77 private sector 78 privatisation 39, 78, 157, 158, 258, 307 probabilistic thinking 67, 71, 79 Procter & Gamble 69, 108 product innovation 13 property and infrastructure 154–60 protectionism 13 Prudential 200 public companies, conversion to 18, 31–2, 49 public debt 252 public sector 78 Q Quandt, Herbert 170 Quandt Foundation 170 quantitative easing 245, 251 quantitative style 110–11 quants 22, 107, 110 Quattrone, Frank 167, 292–3 queuing 92 Quinn, Sean 156 R railroad regulation 237 railway mania (1840s) 35 Raines, Franklin 152 Rajan, Raghuram 56, 58, 79, 102 Rakoff, Judge Jed 233, 294, 295 Ramsey, Frank 67, 68 Rand, Ayn 79, 240 ‘random walk’ 69 Ranieri, Lew 20, 22, 106–7, 134, 152 rating agencies 21, 41, 84–5, 97, 151, 152, 153, 159, 249–50 rationality 66–7, 68 RBS see Royal Bank of Scotland re-insurance 62–3 Reagan, Ronald 18, 23, 54, 59, 240 real economy 7, 18, 57, 143, 172, 190, 213, 226, 239, 271, 280, 288, 292, 298 redundancy 73, 279 Reed, John 33–4, 48, 49, 50, 51, 242, 293, 314n40 reform 270–96 other people’s money 282–5 personal responsibility 292–6 principles of 270–75 the reform of structure 285–92 robust systems and complex structures 276–81 regulation 215, 217–39 the Basel agreements 220–25 and competition 113 the origins of financial regulation 217–19 ‘principle-based’ 224 the regulation industry 229–33 ‘rule-based’ 224 securities regulation 225–9 what went wrong 233–9 ‘Regulation Q’ (US) 13, 14, 20, 28, 120, 121 regulatory agencies 229, 230, 231, 235, 238, 274, 295, 305 regulatory arbitrage 119–24, 164, 223, 250 regulatory capture 237, 248, 262 Reich, Robert 265, 266 Reinhart, C.M. 251 relationship breakdown 74, 79 Rembrandts, genuine/fake 103, 127 Renaissance Technologies 110, 111, 191 ‘repo 105’ arbitrage 122 repo agreement 121–2 repo market 121 Reserve Bank of India 58 Reserve Primary Fund 121 Resolution Trust Corporation 150 retirement pension 78 return on equity (RoE) 136–7, 191 Revelstoke, first Lord 31 risk 6, 7, 55, 56–79 adverse selection and moral hazard 72–9 analysis by ‘ketchup economists’ 64 chasing the dream 65–72 Geithner on 57–8 investment 256 Jackson Hole symposium 56–7 Kohn on 56 laying bets on the interpretation of incomplete information 61 and Lloyd’s 62–3 the LMX spiral 62–3, 64 longevity 256 market 97, 98 mitigation 297 randomness 76 socialisation of individual risks 61 specific 97–8 risk management 67–8, 72, 79, 137, 191, 229, 233, 234, 256 risk premium 208 risk thermostat 74–5 risk weighting 222, 224 risk-pooling 258 RJR Nabisco 46, 204 ‘robber barons’ 44, 45, 51–2 Robertson, Julian 98, 109, 132 Robertson Stephens 167 Rockefeller, John D. 44, 52, 196 Rocket Internet 170 Rogers, Richard 62 Rogoff, K.S. 251 rogue traders 130, 300 Rohatyn, Felix 205 Rolls-Royce 90 Roman empire 277, 278 Rome, Treaty of (1964) 170 Rooney, Wayne 268 Roosevelt, Franklin D. v, 25, 235 Roosevelt, Theodore 43–4, 235, 323n1 Rothschild family 217 Royal Bank of Scotland 11, 12, 14, 24, 26, 34, 78, 91, 103, 124, 129, 135, 138, 139, 211, 231, 293 Rubin, Robert 57 In an Uncertain World 67 Ruskin, John 60, 63 Unto this Last 56 Russia defaults on debts 39 oligarchies 303 Russian Revolution (1917) 3 S Saes 168 St Paul’s Churchyard, City of London 305 Salomon Bros. 20, 22, 27, 34, 110, 133–4 ‘Salomon North’ 110 Salz Review: An Independent Review of Barclays’ Business Practices 217 Samuelson, Paul 208 Samwer, Oliver 170 Sarkozy, Nicolas 248, 249 Savage, L.J. 67 Scholes, Myron 19, 69, 110 Schrödinger’s cat 129 Scottish Parliament 158 Scottish Widows 26, 27, 30 Scottish Widows Fund 26, 197, 201, 212, 256 search 195, 209, 213 defined 144 and the investment bank 197 Second World War 36, 221 secondary markets 85, 170, 210 Securities and Exchange Commission (SEC) 20, 64, 126, 152, 197, 225, 226, 228, 230, 232, 247, 292, 293, 294, 313n6 securities regulation 225–9 securitisation 20–21, 54, 100, 151, 153, 164, 169, 171, 222–3 securitisation boom (1980s) 200 securitised loans 98 See’s Candies 107 Segarra, Carmen 232 self-financing companies 45, 179, 195–6 sell-side analysts 199 Sequoia Capital 166 Shad, John S.R. 225, 228–9 shareholder value 4, 45, 46, 50, 211 Sharpe, William 69, 70 Shell 96 Sherman Act (1891) 44 Shiller, Robert 85 Siemens 196 Siemens, Werner von 196 Silicon Valley, California 166, 167, 168, 171, 172 Simon, Hermann 168 Simons, Jim 23, 27, 110, 111–12, 124 Sinatra, Frank 72 Sinclair, Upton 54, 79, 104, 132–3 The Jungle 44 Sing Sing maximum-security gaol, New York 292 Skilling, Jeff 126, 127, 128, 149, 197, 259 Slim, Carlos 52 Sloan, Alfred 45, 49 Sloan Foundation 49 small and medium-size enterprises (SMEs), financing 165–72, 291 Smith, Adam 31, 51, 60 The Wealth of Nations v, 56, 106 Smith, Greg 283 Smith Barney 34 social security 52, 79, 255 Social Security Trust Fund (US) 254, 255 socialism 4, 225, 301 Société Générale 130 ‘soft commission’ 29 ‘soft’ commodities 17 Soros, George 23, 27, 98, 109, 111–12, 124, 132 South Sea Bubble (18th century) 35, 132, 292 sovereign wealth funds 161, 253 Soviet empire 36 Soviet Union 225 collapse of 23 lack of confidence in supplies 89–90 Spain: property bubble 42 Sparks, D.L. 114, 283, 284 specific risk 97–8 speculation 93 Spitzer, Eliot 232, 292 spread 28, 94 Spread Networks 2 Square 187 Stamp Duty 274 Standard & Poor’s rating agency 21, 99, 248, 249, 313n6 Standard Life 26, 27, 30 standard of living 77 Standard Oil 44, 196, 323n1 Standard Oil of New Jersey (later Exxon) 323n1 Stanford University 167 Stanhope 158 State Street 200, 207 sterling devaluation (1967) 18 stewardship 144, 163, 195–203, 203, 208, 209, 210, 211, 213 Stewart, Jimmy 12 Stigler, George 237 stock exchanges 17 see also individual stock exchanges stock markets change in organisation of 28 as a means of taking money out of companies 162 rise of 38 stock-picking 108 stockbrokers 16, 25, 30, 197, 198 Stoll, Clifford 227–8 stone fei (in Micronesia) 323n5 Stone, Richard 263 Stora Enso 196 strict liability 295–6 Strine, Chancellor Leo 117 structured investment vehicles (SIVs) 158, 223 sub-prime lending 34–5, 75 sub-prime mortgages 63, 75, 109, 149, 150, 169, 244 Summers, Larry 22, 55, 73, 119, 154, 299 criticism of Rajan’s views 57 ‘ketchup economics’ 5, 57, 69 support for financialisation 57 on transformation of investment banking 15 Sunday Times 143 ‘Rich List’ 156 supermarkets: financial services 27 supply chain 80, 81, 83, 89, 92 Surowiecki, James: The Wisdom of Crowds xi swap markets 21 SWIFT clearing system 184 Swiss Re 62 syndication 62 Syriza 306 T Taibbi, Matt 55 tailgating 102, 103, 104, 128, 129, 130, 136, 138, 140, 152, 155, 190–91, 200 Tainter, Joseph 277 Taleb, Nassim Nicholas 125, 183 Fooled by Randomness 133 Tarbell, Ida 44, 54 TARGET2 system 184, 244 TARP programme 138 tax havens 123 Taylor, Martin 185 Taylor Bean and Whitaker 293 Tea Party 306 technological innovation 13, 185, 187 Tel Aviv, Israel 171 telecommunications network 181, 182 Tesla Motors 168 Tetra 168 TfL 159 Thai exchange rate, collapse of (1997) 39 Thain, John 300 Thatcher, Margaret 18, 23, 54, 59, 148, 151, 157 Thiel, Peter 167 Third World debt problem 37, 131 thrifts 25, 149, 150, 151, 154, 174, 290, 292 ticket touts 94–5 Tobin, James 273 Tobin tax 273–4 Tolstoy, Count Leo 97 Tonnies, Ferdinand 17 ‘too big to fail’ 75, 140, 276, 277 Tourre, Fabrice ‘Fabulous Fab’ 63–4, 115, 118, 232, 293, 294 trader model 82, 83 trader, rise of the 16–24 elements of the new trading culture 21–2 factors contributing to the change 17–18 foreign exchange 18–19 from personal relationships to anonymous markets 17 hedge fund managers 23 independent traders 22–3 information technology 19–20 regulation 20 securitisation 20–21 shift from agency to trading 16 trading as a principal source of revenue and remuneration 17 trader model 82, 83 ‘trading book’ 320n20 transparency 29, 84, 205, 210, 212, 226, 260 Travelers Group 33, 34, 48 ‘treasure islands’ 122–3 Treasuries 75 Treasury (UK) 135, 158 troubled assets relief program 135 Truman, Harry S. 230, 325n13 trust 83–4, 85, 182, 213, 218, 260–61 Tuckett, David 43, 71, 79 tulip mania (1630s) 35 Turner, Adair 303 TWA 238 Twain, Mark: Pudd’nhead Wilson’s Calendar 95–6 Twitter 185 U UBS 33, 134 UK Independence Party 306 unemployment 73, 74, 79 unit trusts 202 United States global dominance of the finance industry 218 house prices 41, 43, 149, 174 stock bubble (1929) 201 universal banks 26–7, 33 University of Chicago 19, 69 ‘unknown unknowns’ 67 UPS delivery system 279–80 US Defense Department 167 US Steel 44 US Supreme Court 228, 229, 304 US Treasury 36, 38, 135 utility networks 181–2 V value discovery 226–7 value horizon 109 Van Agtmael, Antoine 39 Vanderbilt, Cornelius 44 Vanguard 200, 207, 213 venture capital 166 firms 27, 168 venture capitalists 171, 172 Vickers Commission 194 Viniar, David 204–5, 233, 282, 283, 284 VISA 186 volatility 85, 93, 98, 103, 131, 255 Volcker, Paul 150, 181 Volcker Rule 194 voluntary agencies 258 W wagers and credit default swaps 119 defined 61 at Lloyd’s coffee house 71–2 lottery tickets 65 Wall Street, New York 1, 16, 312n2 careers in 15 rivalry with London 13 staffing of 217 Wall Street Crash (1929) 20, 25, 27, 36, 127, 201 Wall Street Journal 294 Wallenberg family 108 Walmart 81, 83 Warburg 134 Warren, Elizabeth 237 Washington consensus 39 Washington Mutual 135, 149 Wasserstein, Bruce 204, 205 Watergate affair 240 ‘We are the 99 per cent’ slogan 52, 305 ‘We are Wall Street’ 16, 55, 267–8, 271, 300, 301 Weber, Max 17 Weill, Sandy 33–4, 35, 48–51, 55, 91, 149, 293, 314n40 Weinstock, Arnold 48 Welch, Jack 45–6, 48, 50, 52, 126, 314n40 WestLB 169 Westminster Bank 24 Whitney, Richard 292 Wilson, Harold 18 windfall payments 14, 32, 127, 153, 290 winner’s curse 103, 104, 156, 318n11 Winslow Jones, Alfred 23 Winton Capital 111 Wolfe, Humbert 7 The Uncelestial City 1 Wolfe, Tom 268 The Bonfire of the Vanities 16, 22 women traders 22 Woodford, Neil 108 Woodward, Bob: Maestro 240 World Bank 14, 220 World.Com bonds 197 Wozniak, Steve 162 Wriston, Walter 37 Y Yellen, Janet 230–31 Yom Kippur War (1973) 36 YouTube 185 Z Zurich, Switzerland 62

Against the Gods: The Remarkable Story of Risk
by Peter L. Bernstein
Published 23 Aug 1996

In fact, the potential profit on the option would be limitless. The option on AT&T stock was selling for $2.50 on June 6, 1995. Why $2.50? Resolving Paccioli's unfinished game of balla was kid stuff compared to this! We can only wonder whether two quants like Pascal and Fermat could have come up with an answer-and why they did not even try. The Dutch tulip mania, a striking example of what happens when "oldfashioned human hunches" take over, had occurred only twenty years before Pascal and Fermat first laid out the principles of probability theory; the memory of it must still have been vivid when they began their historic deliberations. Perhaps they ignored the challenge of valuing an option because the key to the puzzle is in the price of uncertainty, a concept that seems more appropriate to our own times than it may have seemed to theirs.

Lonely Planet Amsterdam
by Lonely Planet

Pioneering projects range from building a canal house and canal bridge by 3D printer to offering networks where residents can trade surplus green energy with each other. Best on Film Tulip Fever (2017) Based on the 1999 novel by Deborah Moggach, this love story takes place in 17th-century Amsterdam during the heady days of tulip mania. The Paradise Suite (2015) A Bulgarian woman forced into prostitution, a Swedish piano prodigy, a Serbian war criminal and other troubled characters cross paths in Amsterdam. The Fault in Our Stars (2014) Based on the 2012 novel by John Green, this story of two cancer-stricken young lovers travelling to Amsterdam is sad yet uplifting.

Blood, Iron, and Gold: How the Railways Transformed the World
by Christian Wolmar
Published 1 Mar 2010

Most losses occurred when promoters, either fraudulent, stupid or simply over-optimistic, obtained huge sums of money for lines that were never completed so that investors lost all their cash. Investors were most vulnerable during the railway manias which raged through different countries at various times and were swept up in the rush simply because everyone else seemed to think it was a good idea. Railway bubbles simply fit into the history of similar scandals from the Dutch tulip mania of 1637 to the recent banking crisis. There’s no shortage of elegantly embellished but completely valueless railway company share certificates still adorning living-room walls, dating from the various railway manias of the nineteenth century. However, it was when governments became involved that unbelievably huge sums could be purloined by corrupt promoters and the world centre for such activity was the United States, where several later scams dwarfed even the dodgy dealings outlined in Chapter 6 during the construction of the first transcontinental.

The Personal MBA: A World-Class Business Education in a Single Volume
by Josh Kaufman
Published 2 Feb 2011

A simple blood test by your doctor can verify the levels of many essential nutrients—always consult with your MD before making any major changes to your diet or supplement intake. 4 For more on the neurophysiology of the brain, check out Kluge: The Haphazard Construction of the Human Mind by Gary F. Marcus (Faber & Faber, 2008). 5 http://macfreedom.com. 6 http://www.proginosko.com/leechblock.html. 7 http://www.timessquarenyc.org/facts/PedestrianCounts.html. 8 http://en.wikipedia.org/wiki/Austrian_business_cycle_theory. 9 http://en.wikipedia.org/wiki/Tulip_mania. 10 http://en.wikipedia.org/wiki/Dot-com_bubble. 11 http://en.wikipedia.org/wiki/United_States_housing_bubble. CHAPTER 8: WORKING WITH YOURSELF 1 http://www.pomodorotechnique.com/. 2 http://www.pnas.org/content/103/31/11778.abstract. 3 http://www.ingentaconnect.com/content/hfes/hf/2006/00000048/00000002/art00014. 4 http://www.paulgraham.com/makersschedule.html. 5 http://crashcourse.personalmba.com. 6 Personally, I work with the folks at Timesvr.com—they’re skilled, fast, friendly, and cost effective. 7 http://davidseah.com/pceo/etp. 8 http://govleaders.org/powell.htm. 9 For a complete look at my personal productivity system, visit http://book.personalmba.com/bonus-training/. 10 http://www.markforster.net/autofocus-system/. 11 For an example of how I do this, visit http://book.personalmba.com/bonus-training/.

The Spider Network: The Wild Story of a Math Genius, a Gang of Backstabbing Bankers, and One of the Greatest Scams in Financial History
by David Enrich
Published 21 Mar 2017

Rowe Price, 247 Taibbi, Matt, 157 Tamura, Naomichi, x, 145–46, 290, 445 Tan, Stantley, 276–77, 281–82, 291–92 TARP (Troubled Asset Relief Program), 164–65, 187, 212, 230 Tchenguiz, Robert and Vincent, 332 Team America: World Police (movie), 90 Texas A&M University, 184 Texas electricity markets, 250 Thailand, 115–17, 224 Thatcher, Margaret, 15, 41, 70, 331 Thomson Reuters, 72, 76, 222 Thursfield, Andrew, x BBA meetings, 78 Citigroup Libor submissions, 276–77, 295 first meeting with Hayes, 258–61, 260n Libor, 79, 192, 244, 245–46, 246n Libor trial, 405–6 update on, 445 Tibor, 92, 93–94, 113–14, 269–70, 278 Tighe, Emma, 140, 154, 218, 365, 384, 388 Tighe, Karen, 153–54, 167, 306 Tighe, Sarah Alykulov telephone call, 329–30 cancer of, 381 Citigroup’s firing of Hayes, 303–4, 305–6, 313–14 Citigroup’s investigation of Hayes, 298–99, 300–301 first meetings with Hayes, 137–41 Hayes arrest, 364–65, 367–69, 370 Hayes car accident, 394 Hayes diagnosis, 413–314 Hayes hiring of lawyer, 347–49 Hayes job offers, 213, 230, 231 Hayes prison term, 451–52 Hayes trial, 410–11, 414–16, 419–20, 428–29, 430, 437–38, 443–44 at Herbert Smith, 161, 217–18 honeymoon with Hayes, 307 marriage proposal of Hayes, 209–10 move to Tokyo, 153–55 Old Rectory home, 337–38, 363–64 pregnancy and birth of Joshua, 328, 330, 337 relationship with Hayes, 147–48, 152–55, 167–68 resignation of, 455 SFO investigation, 383–84, 388–89 vacations with Hayes, 160–61, 224, 285–86, 319–20, 402–3 wedding to Hayes, 265, 305, 306–7 Time (magazine), 33 Title X Technology, 360 Tokyo Dome Bowling Center, 93 traders, 17–22, 41–43, 146–47 derivatives and, 31–35 “entertainment” and broker commissions, 50–53 ethos, 23–24 role of luck, 59 Tradition Financial Services, 52–53, 128–29 Treasury Department, U.S., 247–48, 357 Trivedi, Harsh, 351–54 Troy (movie), 237, 459 tulip mania, 32 Tullett Prebon brokers, xii. See also specific brokers Libor investigation, 397–99 polo shirts, 88 switch trades, 170–77 Tyrrell, Steven, xiii, 368–69, 374–75 UBS Adoboli internship, 22 Adoboli trades, 335–37 bankers and traders, x. See also specific bankers and traders CFTC Libor investigation, 270–71, 315–19, 322 culture of, 275, 336–37 FSA investigation, 338–39 government bailout, 164–65, 212 Hayes job offer, 60–61 history of, 80–81 Justice investigation, 323–25 Libor financial settlement, 369–70, 372–73 Libor system, 81–83 OFT investigation, 332–33 Pieri’s anti-Hayes bandwagon, 292–94 post-Hayes trading, 288–94 shareholder meeting, 149–51 switch trades, 169–77 “Umbrella” (song), 153 UniCredit Bank, 220 University of Bath, 67 University of California, 256 University of Delaware, 311 University of London, 447 University of Minnesota, 249–50 University of Nottingham, 14, 16, 21, 22, 335 University of Pennsylvania, 246–47 University of Southampton, 448 Vampire Squid, 157–58 Venice Beach, 209 Vogels, Frits, xi, 168, 335 Wall Street Journal, 6, 188–91 “Libor Fog: Bankers Cast Doubt on Key Rate Amid Crisis,” 190–91, 195, 202–3, 204–5 “Rate Probe Keys on Traders,” 346–47 “Study Casts Doubt on Key Rate,” 196–98, 201–2 Wallis, Deborah, 183, 192 Walsh, Andrew, 150–51 Wandsworth Prison, 444, 450 Waterloo Station, 98 We Need to Talk About Kevin (Shriver), 54 Weill, Sandy, 230 WestLB, 97, 98, 99, 133, 206 When Genius Failed (Lowenstein), 288 White, Paul, x, 283, 334–35 Whitehouse, Mark, 190–91, 196–98 Whitewater controversy, 268 Wikipedia, 207–8 Wiley, Stuart, xi, 107–8, 108n, 170, 214, 225–26 Wilkinson, Danny, xi, 126–30 background of, 127 fees and commissions, 132, 274 Hayes and, 128–29, 130, 155–56, 225–26, 352–54 Hayes firing, 304 Justice criminal charges, 394–95 Libor investigation, 335 FSA/CFTC interview, 352–54 Libor submissions, 99, 130, 132, 225–26, 274 Libor trial, 452–53, 455–56 music and DJing, 412 nicknames of, 126 SFO criminal charges, 404 suspension of, 343–44, 343n Williams, Andrew, 372 Williams, David, 348, 348n, 391 Willkie Farr & Gallagher, 400 Wilmot-Sitwell, Alex, x, 231, 233, 372–73 Windsor Pub, 152–53, 313 Wink, Angus, xii, 173–74, 174n Wiston House, 256–57 World Darts Championship, 401–2 World Trade Center, 120–21, 202 Yomiuri Giants, 93 Youle, Thomas, 249–53 “Does the Libor reflect banks’ borrowing costs?”

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

That there were cycles seemed obvious to most. Securities markets as we understand them today (continuously operating, indoor exchanges) developed in the late 1700s as European governments began selling bonds on a regular basis, mainly to finance wars. There had been famous market manias and panics before—tulip mania in 1630s Holland, and in the early 1700s the Mississippi Bubble in France and the South Sea Bubble in England. It was only in the 1800s that observers began to see a certain regularity in them. Near-clockwork regularity, it seemed. In England there were market panics in 1804–5, 1815, 1825, 1836, 1847, and 1857.

Stocks for the Long Run, 4th Edition: The Definitive Guide to Financial Market Returns & Long Term Investment Strategies
by Jeremy J. Siegel
Published 18 Dec 2007

In 1852, Charles Mackay wrote the classic Extraordinary Delusions and the Madness of Crowds, which chronicled a number of financial bubbles during which speculators were driven into a frenzy by the upward movement of prices: the South Sea bubble in England and the Mississippi bubble in France around 1720 and the tulip mania in Holland a century earlier.8 Let me read you my favorite passage from the book. See if you can relate with this: We find that whole communities suddenly fix their minds upon one subject, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion and run after it. . . .

Stocks for the Long Run 5/E: the Definitive Guide to Financial Market Returns & Long-Term Investment Strategies
by Jeremy Siegel
Published 7 Jan 2014

In 1852, Charles Mackay wrote the classic Extraordinary Delusions and the Madness of Crowds, which chronicled a number of financial bubbles during which speculators were driven into a frenzy by the upward movement of prices: the South Sea bubble in England and the Mississippi bubble in France around 1720 and the tulip mania in Holland a century earlier.8 Let me read you my favorite passage from the book. See if you can relate to this: We find that whole communities suddenly fix their minds upon one subject, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion and run after it. . . .

Business Adventures: Twelve Classic Tales From the World of Wall Street
by John Brooks
Published 6 Jul 2014

More than that, the attitude of educators toward printed textbooks and of business people toward written communication underwent a discernible change; avant-garde philosophers took to hailing xerography as a revolution comparable in importance to the invention of the wheel; and coin-operated copying machines began turning up in candy stores and beauty parlors. The mania—not as immediately disrupting as the tulip mania in seventeenth-century Holland but probably destined to be considerably farther-reaching—was in full swing. The company responsible for the great breakthrough and the one on whose machines the majority of these billions of copies were made was, of course, the Xerox Corporation, of Rochester, New York.

Capitalism in America: A History
by Adrian Wooldridge and Alan Greenspan
Published 15 Oct 2018

By the end of the year, global equities had lost more than $35 trillion in value and American homeowners had lost an additional $7 trillion in equity. Add in corporate entities of all sorts (nonlisted and unincorporated) and global equities had lost about $50 trillion—or close to four-fifths of global GDP for 2008.3 Bubbles are endemic to capitalism and human nature: think of the Dutch tulip mania in the early seventeenth century, when Dutch investors paid extravagant prices for tulip bulbs, or the South Sea Bubble in the early eighteenth century, when the British became obsessed with buying shares in a company selling government debt. People’s animal spirits exceed their rational powers and they overcommit themselves, sometimes horribly so.

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World
by Ruchir Sharma
Published 5 Jun 2016

Embarrassed by that failure, the Bank for International Settlements, the European Central Bank, the IMF, and other authorities began to look at the problem anew, and, by 2011, they had moved along separate paths to similar conclusions. One strong thread in their research linked the major credit crises going back to the Great Depression of the 1930s and in some cases even to the “tulip mania” that tripped up Holland in the 1600s. The precursor of all these crises—and thus the most powerful indicator of a coming crisis—was that domestic private credit had been growing faster than the economy for a significant length of time. This is a very important clue. The authorities also reached another surprising conclusion: Although the total size of a nation’s debt—meaning the total of government and private-sector debt—does matter for the economy’s prospects, the clearest signal of coming financial trouble comes from the pace of increase in that debt.

Boom: Mad Money, Mega Dealers, and the Rise of Contemporary Art
by Michael Shnayerson
Published 20 May 2019

It was just unbelievable, because in May there had been an incredibly strong auction. Huge prices. Records for many artists. Vibrant market. It just turned on a dime. And the ensuing recession in the art market was absolutely the worst thing I’ve ever been through in my career as an art dealer. The phone literally didn’t ring.… It was like tulip mania, like a Ponzi thing, it was crazy. Everybody was making money and everybody was happy, and then when the music stopped it was just like a crushing hangover.”2 Gagosian, like Blum, had tense meetings with his bankers. By now he had a multimillion-dollar personal art collection and could borrow against it, though only up to a point.

The Joys of Compounding: The Passionate Pursuit of Lifelong Learning, Revised and Updated
by Gautam Baid
Published 1 Jun 2020

When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators today differ from yesterday. The game does not change and neither does human nature.9 Human nature has not changed in centuries, and the perennial emotions of greed and fear ensure that speculative follies keep playing out, leading to endless cycles of booms and busts. Prominent historical events include the Dutch tulip mania; the South Sea Bubble (during which a mythical company was chartered “for carrying on an undertaking of great advantage but no one to know what it is”); the Roaring Twenties (including the Florida land bubble), followed by the Great Crash of 1929; the “tronics boom” in the 1960s; and the Nifty Fifty in the 1970s.

Valley of Genius: The Uncensored History of Silicon Valley (As Told by the Hackers, Founders, and Freaks Who Made It Boom)
by Adam Fisher
Published 9 Jul 2018

Carl Steadman: So you have people investing in ideas, some of them good, some of them bad, and because what you get in a frenzied economy that is in search of IPOs are ideas like Pets.com. They were willing to ship you a forty-pound bag of dog food, for no shipping fee, at a tremendous discount. It made no sense, there was no underlying business plan. It was this tulip mania. It was the exuberance, irrational exuberance. Ev Williams: This company would IPO and that company would IPO. We were all swept up in it. Tiffany Shlain: There was so much talk about IPOs that we had an Initial Pumpkin Offering for Halloween. Everyone came out to South Park. I still have all the schwag from that; it was very funny.

The Price of Time: The Real Story of Interest
by Edward Chancellor
Published 15 Aug 2022

D., 163–4 Röpke, Wilhelm, 97, 100, 299 Rothbard, Murray, 30 Rothermere, Lord, 93 Roubini, Nouriel, 207, 254 Rousseff, Dilma, 258 Rucellai, Giovanni, 21 Rueff, Jacques, 85, 91, 115‡, 251 Ruskin, John, 180–81 Sainsbury’s (British grocery chain), 160 Saint-Simon, Louis de Rouvroy, Duke of, 50–51, 52, 57 Samuelson, Paul, 246–7 Sarkozy, Nicolas, 292 Savills (property consultants), 174 saving: bonus of compound interest, 190; China’s savings glut, 268–9; as deferred gratification, 29, 188–90; and interest, xxiv, 44, 77, 188–93, 194–9, 205–6; interest as ‘wages of abstinence’, xxiv, xxv, 188–91; savings glut hypothesis, 115–16, 117, 126, 128–9, 132, 191, 252; Terborgh on, 125* savings & loan crisis, US, 111, 145 Say, Jean-Baptiste, 99 Sbrancia, Maria Belen, 290 Scandinavian banking crisis (early 1990s), 136 Schacht, Hjalmar, 82, 92, 312 Schäuble, Wolfgang, 299 Scheidel, Walter, 204 Schumpeter, Joseph, 16, 32, 46, 95, 218; Capitalism, Socialism and Democracy (1942), 126, 140, 296–7; ‘creative destruction’ idea, xx, 140–43, 153, 296–7; on deflation, 100; History of Economic Analysis, xviii; view of intellectuals, 297 Schwartz, Anna, 98, 99, 105, 116 Schwarzman, Steven, 207 Sears (department store), 169–70 secular stagnation, 77, 124–8, 131, 132–9, 151, 205–6 Sée, Henri Eugene, Modern Capitalism (1928), 28* Seneca the Younger, 20–21 Senior, Nassau, 188, 191 Senn, Martin, 193 shadow banks: in Canada, 174–5; in China, 266, 270, 282*, 283–5, 286; collapse in subprime crisis, 221, 283; illiquid products, 226–7; re-emergence after 2008 crisis, 221, 227, 231, 233; structured finance products, 116, 227, 283–5; Trust companies as precursors of, 84*; types of, 221; ‘Ultra-short’ bond exchange-traded funds (ETFs), 227 Shaftesbury, Anthony Ashley Cooper, Earl of, 27 ‘shareholder value’ philosophy, 163–6, 167, 170–71 Shaw, Edward, 286 Shaw, Leslie, 83, 83* Shiba Inu (cryptocurrency), 308 Shin, Hyun Song, 254, 263 Shiyan, Hubei province, 275 Silicon Valley, 148, 151, 173, 176, 204 Silver, Morris, 7, 11 Singer, Paul, 185, 246 Smith, Adam, 14, 174; on monopolies, 162, 298; view of interest, 27, 27*, 31, 183; on wealth, 181; The Wealth of Nations (1776), xxii, 27–8, 27*, 31 Smithers, Andrew, Productivity and the Bonus Culture (2019), 152* Smoot–Hawley Act (1930), 261 socialism, 188, 297, 298 Soddy, Frederick, 181, 242 Solon the ‘Lawgiver’, 9, 18 Solow, Bob, 128 Somary, Felix, 94–5, 308 Sombart, Werner, Modern Capitalism, 22* Soros, George, 148*, 273, 283 South Africa, 258 South America: loans/securities from, 77, 79–80; precious metals from, 49, 168; speculation in bonds from, 64, 65–6, 91; trade during Napoleonic Wars, 70 South Korea, 267 South Sea Bubble (1720), 62, 65*, 68, 69, 307 Soviet Union, 278 Spain, 144–5, 147, 168, 213, 253, 279; mortgage bonds (cédulas), 117 Special Purpose Acquisition Companies (SPACs), 307 speculative manias, xxiii; Borio on, 135; and cryptocurrencies, 177–9; ‘hyperbolic discounting’ during, 176–7; in period from 1630s to 1840s, 64–6, 67–72, 73, 74, 75–6, 77–8, 79–80; technology companies in post-crisis years, 176–9; before Wall Street Crash (1929), 91 see also Mississippi bubble Spencer, Grant, 177 Sraffa, Piero, 42 St Ambrose, 18 St Augustine, 18–19, 202 St Bonaventure, 19 Stable Money League/Association, 87, 96 Standard Oil, 157 state capitalism, 280, 284, 292–5, 297, 298 Stefanel (Italian clothing company), 147 Stein, Jeremy, 231, 233 Steuart, Sir James, 53, 273 ‘sticky prices’ theory, 87* Strong, Benjamin, 82–3, 86–8, 90*, 92, 93, 98, 112 Stuckey’s Bank, 63, 66–7 subprime mortgage crisis, xxii, 114, 116, 117–18, 131, 211, 292; produces ‘dash for cash’, 227; unwinding of carry trades during, 221, 227 Suetonius, The Twelve Caesars, 12 Suez Canal, 78 Sumerian civilization, 4, 6, 8, 15 Summers, Larry, 124–5, 127, 129, 185, 230, 230*, 235, 302 Sumner, William Graham, ‘Forgotten Man’, xx, xxii, 198 Susa, Henry of, 25 Svensson, Lars, 247 Sweden, 174, 241, 242, 244, 245, 247, 294 Sweezy, Paul, 156 Swiss National Bank, 172–3, 293–4 Switzerland, 172, 174, 226, 233, 241, 244, 245 Sydney (Australia), 175 Sylla, Richard, 4, 11, 68, 109 Tacitus, 20–21 Tasker, Peter, 271 Tawney, R.H., 201 tax structures, 164; offshore tax havens, 210 Taylor, John, 116–17, 129, 252 Tencent, 283 Tencin, Claudine Alexandrine Guérin, Madame de, 51 Terborgh, George, 125–6, 127 Tesla, 176–7 Theranos, 149 Thiel, Peter, 263 Third Avenue (investment company), 227–8 Thornton, Daniel, 192 Thornton, Henry, 41–2, 66*, 70, 75 Thornton, Henry Sykes, 66* Tiberius, Roman Emperor, 12 time, concept of, xviii; and act of saving, 188–90; canonical ‘hours’, 21; and Lewis Carroll, 309; in era of ultra-low interest rates, 59, 177; Franklin on, xviii, 22, 28; and Hayek, 32; interest as ‘time value of money’, xxiv, xxv–xxvi, 10, 14–15, 16, 20, 22, 26–7, 28–32; Lord King’s ‘paradox of policy’, 194, 230*; the Marshmallow Test, 29, 189; and medieval scholars, 19–20; Renaissance writings on, 21; secularization of, 21–2; speculators’ misunderstanding of, 59; and thought in ancient world, 20–21; time as individual’s possession, 20, 21, 25; ‘time in production’, xxiv, 14–15, 16, 22, 95, 95†, 141; ‘time preference’ theory, xxiv*, 28–32, 42, 95, 188–9; Thomas Wilson’s ideas, 26–7, 28, 30 Time-Warner, 167 Tooke, Thomas, 69 Toporowski, Jan, 167 Torrens, Robert, 66 Toys ‘R’ Us, 169 trade and commerce: in ancient world, 6, 7–8, 12, 14, 15; Atlantic trade, 59; business partnerships (commenda, societas), 26; commercial classes/interests, 35, 36–7, 38–40, 41, 43, 44, 66–7; commercial importance of time, xviii, 15–16, 21, 22; emergence of modern trade cycle, 62–4; expansion of in Middle Ages, 19, 21–3, 25–6; international trade, 6, 15, 23, 24, 59, 252–3, 261–2; and Italian Renaissance, 21; in medieval Italy, 21–3; mercantile/shipping loans, 6, 12, 14, 22–3, 26, 219 TransAmerica Life Insurance, 199* Trichet, Jean-Claude, 239 Trollope, Anthony, The Way We Live Now, 73 Truman, Harry, 84 The Truman Show (Peter Weir film, 1998), 185–7 Trump, Donald, 185, 261, 262, 291–2, 299, 304, 310 trusts/monopolies: in early twentieth century Europe, 159; Lenin on, 159–60; merger ‘tsunami’ after 2008 crisis, 160–63, 161*, 168–70, 182–3, 237, 298; ‘platform companies’, 161; Adam Smith on, 162, 298; in US robber baron era, 156, 157–9, 203 tulip mania (1630s), 68 Tunisia, 255 Turgot, Anne-Robert Jacques, 15, 28–9, 30, 218 Turkey, xxiii, 252, 258–60, 263 Turkmenistan, 262 Turner, Adair, 292 TXU (energy company), 162 Uber, 149, 150 ‘unicorn’ start-up companies, 148–50, 153, 155, 173, 176–7 Union Pacific Railroad, 157, 158 United States: as bubble economy, 184–7; credit expansion of 1920s, 87–91, 92–4, 96–8, 112, 203; Democrats’ Green New Deal policy, 302; economic expansion (1929–41), 143; economy in Bretton Woods era, 291, 302; financial crisis (1873), 157; foreign securities/loans in 1920s, 91; inflation in 1970s, 108–9; Knickerbocker Panic (1907), 83–4; large-scale immigration into, 78; loan of farm animals in, 4; long-term interest rates (1945–2021), 134; loss of manufacturing jobs to China, 261*, 261; low economic vitality in post-crisis decade, 124, 150–53, 191; monetary policy in 1900s, 83–4, 83*; post-Second World War recovery, 126; public debt today, 291–2, 291*; recessions of early 1980s, 109–10, 151; reversal of global capital flows (late-1920s), 93; robber baron era, 156–9, 203; shift from manufacturing towards services, 167–8, 182; and zombification, 146, 152–3, 155 see also Federal Reserve, US United States Steel Corporation, 157–8 Universities Superannuation Scheme, UK, 196 Useless Ethereum Token, 178 usury: attacked from left and right, 17; attitudes to in ancient world, 17–18, 19, 20–21, 219; in Britain, 24, 26–7, 34, 40, 42, 65‡, 65; Church law forbids, 18–19, 23–4; definitions in Elizabethan era, 26–7; etymology of word, 5; Galiani on, 218–19, 220, 221; and Jews, 18; Marx on, 16, 200–201; medieval Church acknowledges risk, 25–6; Old Testament restrictions on, 17; Proudhon-Bastiat debate on, xvii–xix, xxi, xxii, xxv, 9; in Renaissance world, 22–3; scholastic attack on, 18–20, 23–4, 25 Valeant Pharmaceuticals, 161, 168–9 Vancouver, 175 Veblen, Thorstein, Theory of Business Enterprise (1904), 158, 159, 166 Velde, François, 58*, 59 Venice, 22, 23 Vinci, Leonardo da, Salvator Mundi, 208–9 VIX index, 228–9, 254 La Voix du Peuple, xvii–xix volatility, 153, 228–30, 233, 234, 254, 304, 305 Volcker, Paul, 108–9, 121, 145, 184, 240 Voltaire, 57 Wainwright, Oliver, 209 Waldman, Steve, 206 Waldorf Astoria, New York, 285–6 Wall Street Crash (October 1929): Fed’s response to, 98, 100, 101, 108; Fisher and Keynes fail to foresee, 94–5; Hayek’s interpretation of, 101, 105; low real rates in 1920s USA, 87–91, 89, 92–4, 96–8, 203; low/stable inflation at time of, 134; monetarist view of, 98–9, 101, 105, 108; predictions/warnings of, 93–5, 96, 101, 105, 308; reversal of international capital flows (late-1920s), 93, 93*, 261 WallStreetBets, 307, 309 Walpole, Horace, 62–3 Warburg, Paul, 94 Warsh, Kevin, 228 wealth: ‘Buddenbrooks effect’, 216; conspicuous consumption by mega-rich, 54–5, 208–10, 212; definitions of, 179–82, 216; elite displays as signs of inequality, 209–10, 212; virtual wealth bubbles, 179, 180, 181–2, 185, 193–5, 206, 215, 216–17, 217†, 229–30, 237; wealth illusion, 193–5, 198 Welch, Jack, 170, 171 Wells, H.

The Intelligent Investor (Collins Business Essentials)
by Benjamin Graham and Jason Zweig
Published 1 Jan 1949

The sales charge is universally stated as a percentage of the selling price, which includes the charge, making it appear lower than if applied to net asset value. We consider this a sales gimmick unworthy of this respectable industry. 2. The Money Managers, by G. E. Kaplan and C. Welles, Random House, 1969. 3. See definition of “letter stock” on p. 579. 4. Title of a book first published in 1852. The volume described the “South Sea Bubble,” the tulip mania, and other speculative binges of the past. It was reprinted by Bernard M. Baruch, perhaps the only continuously successful speculator of recent times, in 1932. That was locking the stable door after the horse was stolen. Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds (Metro Books, New York, 2002) was first published in 1841.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

Continental Europe was the site of all three pivotal elements comprising modern financial economics: joint stock companies, banks conducting fractional reserve lending, and stock exchanges. Each was essentially in place around the time settlers reached Jamestown. That allowed greedy sovereigns and schemers during the Colonial era to profit on a mass scale from the opportunities offered by credit. Perhaps the most famous bubble was the 1636 Tulip Mania that caused the Dutch to wildly bid up prices—some writers suggest even so high that the value of one bulb could feed a merchant ship’s crew for one year; woe the unfortunate sailor who munched one, mistaking it for an onion.9 In the eighteenth century, the Mississippi Scheme in France and the South Sea Bubble in England caused 1720 to be a particularly bad year for deregulation—worse even than the Great Depression.

Expected Returns: An Investor's Guide to Harvesting Market Rewards
by Antti Ilmanen
Published 4 Apr 2011

Yet, it has found a large following among investors and it may have also influenced later academic work on positive-feedback trading and on bubbles. Other research also confirms that fast credit growth and financial deregulation /innovation are common characteristics of major booms that end in tears. Bubbles have a long, infamous history since the Dutch tulip mania (1637) and the South Sea and Mississippi company bubbles (both about 1720). Wall Street in 1929, Japan in 1989, and global technology stocks in 1999 are the most famous equity market bubbles of the past century. Of course, there are alternative explanations for these high equity prices but the explanations involving purely rational stories, such as time-varying risk premia, are unsatisfactory.

On the Edge: The Art of Risking Everything
by Nate Silver
Published 12 Aug 2024

Now, if you’re very discerning and have exactly the right friends, you might hear of some second-rate opportunities that are nevertheless +EV. But from a coked-up stranger at a Miami yacht party? No way. You’re the sucker in that transaction almost always. The Perfect Storm for a Bubble If there was a Mount Rushmore of financial bubbles, the crypto bubble of 2020–21 would deserve a place alongside the Tulip Mania craze that overtook Holland in the seventeenth century, the South Sea Bubble of 1719–20—itself arguably a Ponzi scheme—and the dot-com boom of the late 1990s and early 2000s. Indeed, crypto assets followed a similar trajectory to tech stocks. The Nasdaq declined by 77 percent from peak to trough upon the bursting of the tech bubble in the early 2000s—by comparison, Bitcoin and Ethereum fell by 75 to 80 percent before rebounding.

Debt of Honor
by Tom Clancy
Published 2 Jan 1994

The remarkable result of these seemingly ordinary facts was that the commercial real estate in the city of Tokyo alone had a higher "book" value than that of all the land in America's forty-eight contiguous states. More remarkably still, this absurd fiction was accepted by everyone as though it made sense, when in fact it was every bit as madly artificial as the Dutch Tulip Mania of the seventeenth century. But as with America, what was a national economy, after all, but a collective belief? Or so everyone had thought for a generation. The frugal Japanese citizens saved a high proportion of their earnings. Those savings went into banks, in such vast quantities that the supply of capital for lending was similarly huge, as a result of which the interest rates for those loans were correspondingly low, which allowed businesses to purchase land and build on it despite prices that anywhere else in the world would have been somewhere between ruinous and impossible.