Very few of the heroes of the Golden Age of American finance had much interest in the solid realities of what underlay their structure of stocks and bonds and credits .
The stock market is overpriced. Everything is overpriced. Junk is king.
Every new industry has exuberance in advance of reality. The techies get carried away. There is a period of despair. Then the pendulum swings the other way, and people see the long term potential. It's like when the Internet bubble crashed.
China has been on a historic commodities binge as it doubled the size of its economy in recent years to become one of the world's largest. Even so, those fundamentals begat - as they have so often throughout human history - a feeding frenzy.
There's no doubt in my mind that we'll have a mania in gold. And because the gold and especially silver markets are so tiny, the rush into them will be like trying to push the contents of Hoover Dam through a garden hose. Our positions will go absolutely ballistic.
Gambling in the mark has been the great indoor sport of the capitalists for months, and consequently food has increased by 25 to 100 per cent.
Bubbles are created when something positive is happening. People get over-enthusiastic about it and take the tide higher than it should go. The reality is bubbles are required to create an industry.
More investment trusts securities were offered in September of 1929 even than in August - the total was above $600 million. However, the nearly simultaneous promotion of Shenandoah and Blue Ridge was to stand as the pinnacle of new era finance. It is difficult not to marvel at the imagination which was implicit in this gargantuan insanity. If there must be madness something may be said for having it on a heroic scale.
My take on the whole dot-com bubble was that a lot of people who wanted to make a lot of money got too excited and hyped up the commercial aspects of the Internet prematurely. I think the vision of the Internet as a democratizing medium - as everyone's printing press - is real. We got distracted from that by the mass hallucinations of the bubble.
During the 2000 bubble, many companies rushed to go public before they had any revenue.
News media stimulate bubbles, since stories about them boost their audience.
Asset bubbles have happened even without not-so-easy money. And, in a depressed economy, where alternative uses of money are not great, people are going to bid up the prices of profitable corporations and stuff like that.
In a bubble, eventually people start saying, 'Wait a minute... these prices are way too high! What is anyone buying anymore? What could they possibly be thinking?' And then there's a correction and a bursting.
The worst excesses of the dot-com era are gone.
When we went crazy, and we did go crazy on residential real estate, it set things in motion that just - the dominoes started toppling.
