Frozen soap bubbles. How awesome is that?
via April B.
frozen bubblesPure CSS speech bubbles – Nicolas Gallagher
Don't work in IE6, though...The Atlantic Online | December 2008 | Pop Psychology | Virginia Postrel
imperfect people create imperfect financial situations, regardless of prior experiences. fascinating!
Postrel on a laboratory experiment where people buy and sell a guaranteed and specified security. "Here, finally, is a security with security—no doubt about its true value, no hidden risks, no crazy ups and downs, no bubbles and panics. The trading price should stick close to the expected value. At least that’s what economists would have thought before Vernon Smith, who won a 2002 Nobel Prize for developing experimental economics, first ran the test in the mid-1980s. But that’s not what happens. Again and again, in experiment after experiment, the trading price runs up way above fundamental value. Then, as the 15th round nears, it crashes...you don’t just get random noise. You get bubbles and crashes. Ninety percent of the time. So much for security. "
These lab results should give pause not only to people who believe in efficient markets, but also to those who think we can banish bubbles simply by curbing corruption and imposing more regulation. Asset markets, it seems, suffer from irrepressible effervescence. Bubbles happen, even in the most controlled conditions.
At least that’s what economists would have thought before Vernon Smith, who won a 2002 Nobel Prize for developing experimental economics, first ran the test in the mid-1980s. But that’s not what happens. Again and again, in experiment after experiment, the trading price runs up way above fundamental value. Then, as the 15th round nears, it crashes. The problem doesn’t seem to be that participants are bored and fooling around. The difference between a good trading performance and a bad one is about $80 for a three-hour session, enough to motivate cash-strapped students to do their best. Besides, Noussair emphasizes, “you don’t just get random noise. You get bubbles and crashes.” Ninety percent of the time.Progressive enhancement: pure CSS speech bubbles – Nicolas Gallagher — Blog & Ephemera
WSJ article that has one part of the housing collapse that I hadn't heard before. Apparently inflation data that gets reported and looked at by the Fed and other regulators doesn't include home prices, it includes rental prices. Since the housing bubble was driven by mortgages, rents didn't spike nearly as much home prices. Had a truer picture of inflation been reflected in the numbers regulators been looking at the rate would have been double what was reported and likely regulators would have had to act in some way.
A great piece on the differences between the housing crash and the dot com bubble.
WSJ.com | Bubbles have been frequent in economic history - Steven Gjerstad and Vernon Smith explain why the housing crash ruined the financial system but the Dot-com collapse did not
fantastic wsj essay on formation of bubbles, experimental economics