Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
Interpretation
Speculative markets are often misleading, and recognizing this doesn't necessarily improve prediction accuracy.
Robert J. Shiller highlights the complexity of speculative markets where illusions can cloud judgment. While it's essential to recognize the follies within these markets, understanding them doesn't simplify forecasting outcomes, as the dynamics of these illusions are unpredictable and can change rapidly.
In practice
During a financial seminar discussing market behavior.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
I think that a lot of people in all walks of life have the impression, of course, that, 'I specialize in something. I can't - I don't have the time to read other things. I'll just go to pure entertainment when I'm relaxing, and then I'll come back to my pure specialty.' That produces - that attitude produces idiot savants, unfortunately.
There was an awful rainbow once in heaven: We know her woof, her texture; she is given In the dull catalogue of common things. Philosophy will clip an angel's wings.
In order to arouse sympathy, the aristocracy was obliged to lose sight, apparently, of its own interests, and to formulate its indictment against the bourgeoisie in the interest of the exploited working class alone. Thus, the aristocracy took their revenge by singing lampoons on their new masters and whispering in his ears sinister prophesies of coming catastrophe.
It would be foolish to suggest that government is a good custodian of aesthetic goals. But, there is no alternative to the state.
A man who goes forth to take the life of another whom he does not know must believe only one thing: that by his act he will change the course of history.
All is disgust when a man leaves his own nature and does what is unfit.
For instance, we're always fighting amongst each other. Who gives us the arms? And then we become indebted to wherever we are buying them from - with what? The very resources we need to keep there.
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