Monday, July 11, 2005

More Galbraith: Financial History Time Frame

People's short financial time frame is a contributing factor in a speculative episode. The last bubble was tech stocks. Do home buyer's remember housing price declines that occured in the early 90's in some locales? Galbraith writes:

..for built into the speculative episode is the euphoria, the mass escape from reality, that excludes any serious contemplation of the true nature of what is taking place.

Contributing to and supporting this euphoria are two further factors little noted in our time or in past times. The first is the extreme brevity of the financial memory. In consequence, financial disaster is quickly forgotten.

People quickly forget the financial past. Or maybe they are just uninformed We here in the housing reality community are here to remind people of this speculative episode.


  1. People will never learn because they do not like the conclusion.

  2. I remember the past, too - people were predicting the end of the dot com bubble _EVERY YEAR_. Eventual downturns do not equal immediate downturns.


  3. "Eventual downturns do not equal immediate downturns."

    Very true. But there is much evidence streaming in to support the notion that price declines are arriving soon to many of the bubble markets.