|
PureBytes Links
Trading Reference Links
|
I have read Mackay several times, and I take away a different picture of
financial manias.
The South Seas and Mississippi bubbles were originally legitimate
government sponsored projects that were turned into frauds when
speculative fever hit. After the South Seas bubble particularly there
was a flurry of new projects applied for, many for no purposes except to
take investors money. The government refused most of these applications,
and in fact changed the laws regarding new stock companies to make it
harder to start one. This was self-interest -- the government wanted to
protect its interest in the South Seas Co.! But there were mambers of
Parliament who spoke against the South Seas Co., to no avail.
The best analogy I have thought of is the expectation of more and weaker
IPOs at a market top.
The tulipmania is very simple supply and demand -- when a bulb became
valuable, a few months or years later everybody could grow it, and the
price busts.
For reading more applicable to the present time, try Kindleberger,
'Manias, Panics and Crashes'.
Regards, DanG
|