4 ms·
Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (1852)
- deleted 3mo ago[deleted]
- rawgabbit 3mo agoSupposedly investors are leveraging/borrowing money to buy into AI stocks right now...
- daveguy 3mo agoRuh roh. https://www.bbc.com/news/articles/cgrkd41n2v9o https://www.bbc.com/news/articles/cgrkd41n2v9o
- IshKebab 3mo agoThat's not about LLMs.
- daveguy 3mo agoNo, but it is about the, very expected, shitshow caused by the AI hype. When companies think cramming AI in any random place is a magic bullet for replacing workers, shit breaks. Because AI is dumb af. LLMs are just the shittiest of the ways to do it. Do you honestly think this particular "cram AI in everything" isn't related to the current AI hype? Or that AI applications and companies providing things like this won't crash right along with the general llm AI hype and leveraged investments?
- IshKebab 3mo agoNah, the kind of AI they were using has been around for a long time (AlexNet is 13 years old), and before that they would have used classical computer vision. The only thing that happened here is that they didn't check it worked before firing everyone. That can happen with any automated system, AI or not.
- daveguy 3mo agoI am referring to the hype causing it to be adopted now instead of a decade ago, not the specific implementation. The hype causing people to adopt AI of all kinds hastily without proper validation.
- smallmancontrov 3mo agoOh, yeah, that's cooking lol: https://fred.stlouisfed.org/series/BOGZ1FL663067003Q https://fred.stlouisfed.org/series/BOGZ1FL663067003Q Speaking of which, I noticed that the big market reversal during the beginning of the Iran war happened right around when ESLR requirements were due to relax. Is this a transmission mechanism for that? Did some of the big brokerages run a big promotion (0% APR on margin debt!) or something?
- glitchc 3mo ago$600+ billion doesn't seem like much. I was expecting more tbh.
- IAmGraydon 3mo agoThat chart (and many from FRED) is unfortunately not useful without viewing it on a logarithmic scale. Things can look quite parabolic in a linear space, but exponential growth is quite normal in many financial contexts. Click "edit graph" and change units to "natural log". Now look again. You'll see that the growth in margin loans is absolutely normal, and actually has only recently recovered from the dip caused by the 2008 financial crisis.
- w10-1 3mo ago> change units to "natural log" Great tip, but I didn't see "natural log" specifically. Perhaps "Compounded rate of change" is most applicable? That's still mostly above 0 historically, indicating margin usage is ever-increasing. The helpful graph would be margin usage as a weighted percentage of market participation.
- IAmGraydon 3mo agoNatural log is in there - I just tried it myself. It's the second selection from the bottom in the "Units" dropdown.
- mempko 3mo agoMargin debt (debt used to leverage stock buying) Is near record highs, and most of it is flowing into AI stocks ...
- mlhpdx 3mo agoPeople have been people since there have been people.
- rauljara 3mo agoMy intro to psychology classes was one of the most valuable classes I ever took, just with the way it systematically shattered my own notion of how much I could trust my own notions of perception and thought to be a rational and accurate reflection of reality. I definitely had a notion of how irrational “people” could be before that, but of course I somehow thought I was above all that.
- steezeburger 3mo agoThis is why my favorite book is Thinking, Fast & Slow. It blew my mind and totally made me think about almost everything differently. https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow
- _jayhack_ 3mo agoThe content on "priming" (significant pillar of the book) has collapsed as part of the reproducibility crisis in psychology. More here: https://replicationindex.com/2017/02/02/reconstruction-of-a-train-wreck-how-priming-research-went-of-the-rails/ https://replicationindex.com/2017/02/02/reconstruction-of-a-...
- tsunamifury 3mo agoAs someone who used priming heavily at Google, and its wide use in social networks to billions in revenue. I’m gonna go with the academics trying to take this down are BS. Adam Curtis even suggests lightly that the takedown of priming in academia was paid for to bury its actual effectiveness (and liability by implication)
- ithkuil 3mo agoThe reproducibility crisis reproducibility crisis?
- tsunamifury 3mo ago
- wduquette 3mo agoExcellent book. The high point for me was the enterprising fellow who set up a stall in London during the South Sea Bubble (the original bubble!), allowing people to invest in "An undertaking of great advantage, but nobody to know what it is." People lined up for a couple of days to give the fellow their money...after which the fellow disappeared, never to be seen again. No lies detected!
- Joel_Mckay 3mo agoWell they did disrupt the market, albeit at the cost of looking over their shoulder for the rest of their life. lol =3
- jgilias 3mo agoWasn’t tbe Tulip Bubble the original bubble?
- WheelsAtLarge 3mo agoYou all renember SPACs,Special Purpose Acquisition Companies. And all the "experts" who needed the money because they had some great investment that could not be financed any other way. That wave hit its peek less than 5 years ago. Yup, that was a great way to invest. I suspect it happens at every cycle.
- dogscatstrees 3mo agoNot sure why you're downvoted. Chamath Palihapitiya was a tome of SPAC heyday.
- deleted 3mo ago[deleted]
- dpflan 3mo agoAlong similar lines, the economist John Kenneth Galbraith has a book on financial bubbles and irrational crowd mentalities in financial market over the centuries: A Short History of Financial Euphoria [1]. Short, approachable, and interesting. [1] https://www.goodreads.com/en/book/show/270746.A_Short_History_of_Financial_Euphoria https://www.goodreads.com/en/book/show/270746.A_Short_Histor...
- cs702 3mo ago... and funny too. A great book!
- scyclow 3mo agoThis is a fun book, but it famously embellishes, exaggerates, and sensationalizes the tulip bubble [1]. The efficient markets people obviously don't like the story, but there doesn't seem to be much evidence that it happened on the same scale that Mackay portrays it. [1] https://en.wikipedia.org/wiki/Tulip_mania#Modern_views https://en.wikipedia.org/wiki/Tulip_mania#Modern_views
- zeafoamrun 3mo agoYes a lot of it was based on anti tulip propaganda pamphlets that circulated at the time, and survived more because they were more interesting due to the exaggerated stories.
- fasterik 3mo ago>Peter Garber argues that the trade in common bulbs "was no more than a meaningless winter drinking game, played by a plague-ridden population that made use of the vibrant tulip market." So basically, it was the GameStop of the 1630s. Humans never change.
- throwaway873527 3mo agoInterestingly, Charles Mackay, the author of Extraordinary Popular Delusions and the Madness of Crowds, was himself one of the most ardent cheerleaders for the Railway Mania [0] "urging people to put their money into the railways and pooh-poohing those who were concerned." and "He had become famous by mocking the bubbles of the past - but had rather less to say about the far more serious bubble that he himself had helped to inflate."[1] [0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927396 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927396 [1] https://www.bbc.com/news/business-51311368 https://www.bbc.com/news/business-51311368
- JackFr 3mo agoI happened to read Trollope's The Way We Live Now, which is a fantastic take on the railway mania, at the height of the dot com bubble. Really increased the enjoyment to read about it and see it unfold in real time.
- lstodd 3mo agoHelping to inflate a bubble is a valid strategy as long as you undestand the mechanics enough to organize a favourable exit. I think we have lost a number of treatises on this exact subject since at least Egypt's old kingdom, 3000BC.
- lazide 3mo agoAka ‘don’t be the biggest sucker’?
- eykanal 3mo agoIf you're interested in this type of stuff I strongly recommend "The True Believer" by Eric Hoffer. He describes the social psychology of mass movements, looking largely at religion and nationalism. He wrote it in 1951, but feels nearly perfectly applicable to today's global nationalistic trends. It's an incredibly compelling read. [1]: https://en.wikipedia.org/wiki/The_True_Believer https://en.wikipedia.org/wiki/The_True_Believer
- bit_economist 3mo ago[dead]
- spinchange 3mo agoI made a more stylized html version from the Gutenberg copy: https://spinchange.github.io/memoirs-of-extraordinary-popular-delusions-and-the-madness-of-crowds/ https://spinchange.github.io/memoirs-of-extraordinary-popula...
- IndySun 3mo agoThanks!
- deleted 3mo ago[deleted]
- lysace 3mo agoThe visual design of this landing page reminds me of soulless pay to view journals. I don't like that. The visual design of the actual online book/HTML is excellent.
- boznz 3mo agoGutenberg might be ugly, but it was fast to load, had all the data I needed and I was downloading the ePub within 5 seconds. That's a winning formulla these days in my book (no pun intended)
- lysace 3mo agoI literally instinctively pressed the back button the first time. I don't understand this instinct you're displaying here, to defend anything because it's open/free. It can be made better. Can't we all agree that is a good thing?
- boznz 3mo ago>Gutenberg might be ugly, but it was fast to load, had all the data I needed and I was downloading the ePub within 5 seconds. That wasn't a defense, that was me saying it worked well for me. Looking at it again in light of your comment, I might even not even use the "ugly", it is actually quite a clean layout, easy to use, doesn't waste screen space, and I would double-down on it being perfectly fit for purpose. each to his own I guess.
- narrator 3mo agoThis book is an interesting chronicle of financial bubble history, but a far more distilled and actionable understanding of crowd psychology is Gustav Le Bonn's "The Crowd - A Study of the popular Mind" (1895): https://www.gutenberg.org/ebooks/445 https://www.gutenberg.org/ebooks/445
- rramadass 3mo agoYou have to be careful while studying Gustave Le Bon and his works. He was a product of his times and so there is an undercurrent of racism in this book due his being influenced by pseudo-scientific "Social Darwinism" theories - https://en.wikipedia.org/wiki/Social_Darwinism https://en.wikipedia.org/wiki/Social_Darwinism Approach it as just a sociological/psychological case study of the 1800s and there is much to learn. Book overview and excerpts - https://en.wikipedia.org/wiki/The_Crowd:_A_Study_of_the_Popular_Mind https://en.wikipedia.org/wiki/The_Crowd:_A_Study_of_the_Popu... Author - https://en.wikipedia.org/wiki/Gustave_Le_Bon https://en.wikipedia.org/wiki/Gustave_Le_Bon
- narrator 3mo agoThe guy was horrified by Napoleon and the violence of the French Revolution, so he mainly spends the book criticizing his fellow white catholic people in France. Yes, he says racist things about other nations, but the parts about France which was all his exact same ethnic group / religion are more timeless.
- wduquette 3mo agoAnd then, along with economic bubbles you also get moral panics. Seen a bunch of those in my time as well. It's a similar thing.
- dgellow 3mo agoFor a more recent and way more reliable book on economics mania I would suggest “Boom and Bust: A Global History of Financial Bubbles” by William Quinn and John D. Turner https://www.goodreads.com/book/show/48989633-boom-and-bust https://www.goodreads.com/book/show/48989633-boom-and-bust
- boznz 3mo agoThe book has aged, but humanity hasn't
- lazide 3mo agoA sucker is born every minute.
- rramadass 3mo agoAnother great book in the same vein is; The Natural History of Nonsense by Bergen Evans (1946). Author - https://en.wikipedia.org/wiki/Bergen_Evans https://en.wikipedia.org/wiki/Bergen_Evans Reviews - https://www.goodreads.com/book/show/375107.The_Natural_History_of_Nonsense https://www.goodreads.com/book/show/375107.The_Natural_Histo... Pdf - https://tzmvirginia.wordpress.com/wp-content/uploads/2013/12/evans-the-natural-history-of-nonsense.pdf https://tzmvirginia.wordpress.com/wp-content/uploads/2013/12... Excerpt: This book is a contribution to the natural history of nonsense. It is a study in the paleontology of delusion. It is an antibody for all who are allergic to Stardust. It is a manual of chiropody for feet of clay. ... This book is intended as a sort of handbook for young recruits in the gay cause of common sense. It indicates where the main armies of ignorance are now encamped and tells in a secret code what garrisons are undermanned or mutinous. It tries to show the use of cover and camouflage and the techniques of infiltration and retreat. It maps road blocks and mine fields and shows how to rig a booby trap. It warns of counterespionage and gives— again in code—the five infallible signs to know a fool. When the recruit has finished with it he can toss it over the wall into the enemy's barracks. It may encourage desertion.
- inquirerGeneral 3mo ago[dead]