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Bubbles occur when undue attention is directed towards something. When people are asking "are we in a bubble", there is no question that we are in a bubble. Nob
by 9rx 11mo ago
Bubbles occur when undue attention is directed towards something. When people are asking "are we in a bubble", there is no question that we are in a bubble. Nobody pays attention to things aligned to the fundamentals.
That doesn't mean there will be a crash, though. Not all bubbles pop.
- mxschumacher 11mo agowhat are some historical examples of bubbles that didn't pop?
- 9rx 11mo agoSince this is HN, I'll go with the most obvious: Software development. Unsustainable, speculative growth through the COVID-19 period, but on the other side relatively slow decline.
- simianwords 11mo agoThis is the perfect example of people who constantly cried that it is a bubble but it wasn’t.
- 9rx 11mo agoNobody pays attention to things aligned to the fundamentals. When people are crying that there is a bubble, it is a bubble. Plain and simple. We know for certain it was a bubble as non-bubbles have sustainable growth. As all the software developers now struggling to find work will be happy to tell you, the growth wasn't sustainable. The proof is in the pudding.
- simianwords 11mo agoHow do you prove that software development is a bubble? Stock prices are at all time high and continuously growing.
- 9rx 11mo ago> How do you prove that software development is a bubble? By looking at the software development market. How else would you do it? Salaries rose sharply from 2020-2023, but then plateaued and are now starting to decline. Slowly, however. It did not crash. It ticks the boxes: Rapid price appreciation, speculation, a disconnect from fundamentals, widespread media attention, and an eventual correction. > Stock prices are at all time high and continuously growing. If we're sharing random facts: Global average temperature is also at an all time high and continuously increasing.
- simianwords 11mo ago1. the labour market has not much to do with whether it is a bubble or not 2. definition of bubble is that the market cap must precipitously reduce, which it hasn't.
- 9rx 11mo ago> the labour market has not much to do with whether it is a bubble or not How can the very market we're talking about not indicate whether there is a bubble in that market or not? Do you think we should be looking at the price of soybeans instead? > definition of bubble is that the market cap must precipitously reduce, which it hasn't. Incorrect. It has, just not by very much. Which isn't surprising as we already established that there wasn't a crash.
- simianwords 11mo agoWhat is your definition of bubble then? If not by market cap?
- 9rx 11mo agoWhy read comments in isolation? We already went over this: - Rapid price appreciation - Speculation - A disconnect from fundamentals - Widespread media attention - An eventual correction If market cap, how do you explain housing bubbles? Market cap is not applicable to housing.