Extraordinary Popular Delusions

What Hacker News says

1. TheLarchSep 2016
   This is a good read. https://www.amazon.com/Extraordinary-Popular-Delusions-Charl.... Market participants often do know there's a bubble. However, if your neighbor keeps making more and more money selling tulips (that was a thing), then you will be tempted to buy some tulips yourself, knowing full well that you are commanding an absurd price.

   Bubbles can be more "musical chairs" than rational pricing.

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2. uuillyApr 2008
   I think the tulip bubble was the Dutch, not the Ottomans.

   Either way, great book on the subject: http://www.amazon.com/Extraordinary-Popular-Delusions-Madnes...

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3. stanriversJun 2021
   Oh, that seems interesting - like a companion book to the more flamboyant one, Extraordinary Popular Delusions; sounds like it is more statements of facts and unbiased accounts, as opposed to entertainment?
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4. joe_the_userJun 2012
   I'd start from the other direction.

   The newness of this stuff is overrated. The bitcoin phenomenon isn't ultimately different from phenomena described by Mackey: http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions...

   As we know, each new version of speculative excess has the slogan "it's different this time". And each one is different, in some way. And you can extract various interesting particular lessons from all these newnesses - I'm sure after 2008, someone's written a deep, interesting article on the failure of the Gaussian copula‎ but really, you didn't need to understand the heat equation and Ito's Formula to know that synthetic bonds were a problem in 2006 (I'd recommend the enlightening discussions of Doug Noland of Prudent.com from that time).

   But it is important to not allow ourselves to let the details of these situations distract us from the psychological dynamics which ultimately has carried all these phenomena. This psychological dynamic allows a slightly stretching of numerous points to add up to the concrete mistakes one point can point out later as "what went wrong". And these "what went wrong then" arguments are themselves dangerous since they general are coupled with "so this time, the different thing we are doing is..." and so forth.

   Essentially, understanding magician's tricks are great. But never let yourself be fooled by the belief that you know all the tricks.

   And I writing with the assumption that bitcoins aren't a "medium of exchange" in any meaningful way - for example, I could directly my car for something else valuablle far more easily than I could directly trade bitcoins and cars aren't a very meaningful medium of exchange today. This is the position that I believe most serious economists take, Nobel Prize winner Paul Krugman being on record here (not that I think this is really a left-right question).

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5. mechanical_fishAug 2009
   you think how lucky you are to be alive now, when the irrationality quotient is so much lower.

   I can't tell if you're being serious or if this is the most deliciously ironic riposte that I have ever had the pleasure to read. Either way, I'm grateful.

   Yes, thank goodness for our increased rationality since the days of Extraordinary Popular Delusions. If not for all the rational thinkers we have today, we might have had to endure one or even two completely irrational economic bubbles in the last decade alone. Man, wouldn't that have sucked?

   Anyway, I agree that the irrationality quotient is lower, but I wouldn't go so far as to claim that it's much lower. ;)

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