1) Generally, the nature of a bubble is that nobody knows when it will pop. People knew about the U.S. asset bubble in the mid-2000s for years, but even those not caught up in the bubble mass psychology couldn't accurately predict when it would collapse. The same was true of the dot-com bubble around 2000. You can be right that there is a bubble, but be far wrong about when it ends.
2) There was a stock broker looking for new business. He cold called 512 people (he must have been a quant); half he told to sell X stock, half he told to buy. The next week he called the 256 for whom he'd made the right prediction and did the same again: Half he told to sell, half to buy ... several weeks later he was down to 16 people. He called all of them and said, 'look, I was right 5 times in a row ...'.
Except, what you just described is a scam and not something a registered broker can do.
FTFY
The point is that if enough people make prediction, some of them will right over and over and over - even though it's all random.
Ha, that's a great observation; I hadn't thought of it. On one hand, I'm very uncomfortable with any implied comparison to the most well known practitioner of parables. On the other, many others have used the form. Maybe I'll write all my HN posts in parable form - 'those who have ears to hear' will understand; the others I won't have to deal with. I could use it for business emails too.
Coming up with that many parables might be challenging.
I actually replied to you ask who you were referring to, since I had no idea, but then another comment said who it was so I deleted my reply.
I clearly am never going to be able to use the word "parable" again. I'll say fable from now on, even though fables have animals in them, not humans.
It's a really effective technique for getting a point across to most people if they'll give you the time to listen and you're a good storyteller. It's a bit less effective in highly nerdy spaces but still worth doing.
* Actually a show within the actual show "Square One TV"
The market can stay irrational longer than you can stay solvent.
(Actually asking, I know they've been loosening their financial walls but am not sure what the current controls are)
Chinese equities are something else entirely, closer to a derivative class. And hard to trade in directly (not that I have tried or would ever try -- I'm in index funds).
And the truth is, the banking system is less liquid, and the equities market much smaller, than developed economies. Oh, also, short-selling is illegal, I believe.
So no, there aren't any natural, market-driven checks on this stuff.
Before an econ degree I thought it could all be understood the way we understand, say, a chemical reaction, or some process with rules, laws and order.
But afteran econ degree the thing I realized is that money and economics, it's all about people. Money and debt has no intrinsic value (especially in 2017)--it's just promises and credits people made to each other.
But people are prone to irrationality, cheating, and frankly, their own bullshit. The global financial system in 2017 has not done everything it can to minimize this, either. If anything, they take advantage of it where it profits them.
When the collapse will happen, people will be outraged and will pretend like in Greece that they were betrayed by their politicians, lied to. But this accumulation of debt happens in plain sight, it is just that no one seems to care.
Hard to predict the timig, like it is hard to predict the timing of a market crash. I have heard people calling the end of the current economic cycle for the past 5 years. Some say Trump has delayed a correction that should have happened this year by 2-3 years (if his economic package goes through). Well it's the same with the accumulation of debt. You can live on the credit card as long as your creditors are not concerned about your credit. At one point the sentiment turns and your credit lines get cut. Then it is the end. Greece is there. Italy is close. France and Japan a little further. The US will get there eventually.
[1] https://www.thenation.com/article/goldmans-greek-gambit/
But let's say a majority of voting eligible citizens decided their country needs to dial down debt-fueled growth? Well there's almost nothing they can do, even though popular opinion has changed.
In Greece, even with the fraud that went on voters still had to know bad financial choices were being made. Heck, I live in the U.S. and know when politicians are using financialeering to make the books balance better...
This kept German industry competitive, and enhanced exports. This overall made the euro stronger, but not as strong as the deutschmark would have been. Greece suffered from the other end: they became less competitive by being tethered to Germany's economy.
Source pdf (page 1): https://www.rba.gov.au/publications/bulletin/2017/mar/pdf/bu...
US DOE and IEA oil forecasts are similar.
If you mean sound growth, they were right. That has ended and growth is increasingly based on financial tricks that will make things worse in the long term, so I would say the experts turned out to be correct.
Also, even with all the debt, yearly GDP growth is down from the previous 10% to something like 6%, so again the experts were right.
The value of these analyses is they try to plumb the limits of the model; there was a substantial sea change in how China's economy operates ~2008-9, with a shift towards massive debt growth. That's inherently less sustainable, particularly because the rate of debt growth is climbing.