Meetings are indispensable when you don't want to do anything.
-- John Kenneth Galbraith

⬆ #Quotes #JohnKennethGalbraith #Meetings

⬇ #Photography #Panorama #Canyon #SlickRock #IcebergCanyon #LakePowell #Utah

RT @samvega
@0InterestMath “The process by which banks create money is so simple that the mind is repelled. When something so important is involved, a deeper mystery seems only decent.” #JohnKennethGalbraith 🤑

RT @samvega
@0InterestMath “The process by which banks create money is so simple that the mind is repelled. When something so important is involved, a deeper mystery seems only decent.” #JohnKennethGalbraith 🤑

The J.K Galbraith "bad investments driving out good" dynamic is basically: when investors' portfolios go so poorly that they need to raise cash to cover obligations, they'll sell anything to raise that.

So if some IvanInvestor is 50% in HonestSamsSkeeveyStock and 50% in BlueChipCo, leveraged 50%, then if HSSS crashes, IvanInvestor must sell BlueChipCo to cover margins. (Or other obligations.)

If there are enough IvanIvestors ... the price of BSC starts to move.

With housing it's similar, though the mechanism is often of reserves or assets, particularly for banks. With a sufficient movement, enough sellers become "highly motivated" that the market as a whole moves.

Of course, if you're planning to profit from this, you've got to have lower exposure and cash (or equivalently robust assets, which aren't falling) on hand to be able to buy. That tends to be a wealth ratchet for the already uber-wealthy.

#JKGalbraith #JohnKennethGalbraith #GreshamsLaw #Housing

@pluralistic Another ... interesting ... dynamic of collapsing bubbles is of bad investments driving down good.

J.K. Galbraith notes in The Great Crash: 1929, a book I know you've read and like --- see also "bezzle".

Galbraith:

The great investment trust boom had ended in a unique manifestation of Gresham's Law in which the bad stocks were driving out the good.

#Housing #Bubbles #JKGalbraith #JohnKennethGalbraith #TheGreatCrash1929 #GreshamsLaw