An interesting analysis of the rationality of the stock market, from a British perspective
http://www.youtube.com/watch?v=SJ_qK4g6ntM
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Irrationality is not all bad. In the Upside of irrationality we examine some of the positive effects irrationality have on our lives and offer a new look on the irrational decisions that influence our personal lives and our workplace experiences.
When we make decisions we think we're in control, making rational choices. But are we? Entertaining and surprising, Ariely unmasks the subtle but powerful tricks that our minds play on us.
Well said even in Humor!
I kept thinking who are the ones who really suffer…and do the big companies really lose anything or those running them.
No…it is only me and you who suffer for the Ponzi game of eons
Might be time for a different kind of banking system
One based on the gold standard…How is that for an original idea
What a mess
Mark J. Ryan
Thanks for the link to this video! I laughed, ruefully, at several of the points that were made.
Robin Rogers
Thanks for link. Please keep this posted for awhile. I want to send it to several friends who may not see it for a couple of days.
I love the way this pair boils it down so nicely to laymen’s terms. If only my econ classes in college had been this simple…Of course then we might have all become investment bankers. Thanks Dan. We have a link back to your blog in thanks for your discovery and sharing of this great demonstration.
A Black man in Alabama sitting on the porch of his run down house just jumping at the chance for a sub prime mortgage so he can buy this wreck???? Come on. This is 2008…enogh with the stereotypes.
Sadly, a very good explanation of what at the latest guess will be a $1-trillion economic loss affecting directly 1 million homeowners.
The targets for these marketing efforts were many times black but primarily urban and with a high equity ratio. They were initially lured into financing education, renovation, and health bills for themselves and their family.
Within a few years through penalties, balloon payments, negative amortization, etc. they owe more than their house is worth.
For a detailed explanation, download a copy of A Tale of Three Markets: The Law and Economics of Predatory Lending by Kathleen Engel and Patricia McCoy at ssrn.org. They wrote the definitive treatment of the area of concern in 2005.
I adapted their work and defined Canadian predatory franchise lending in 2006.