Some call it an economic bubble, others a recession, some even go so far as calling it a depression. However, for AIMS Fellow in Financial Markets Harry Koza the latest economic downturn is an example of ‘market mania’.
In The Semiotics of the Credit Crunch and the Next Bubble, Koza examines past financial manias and points out that the signs were all there for the latest ‘bubble’, if only people had been willing to read them. And he says recovery from the current downturn will likely take longer than most are predicting.
Koza also suggests that the stimulus packages now in vogue with governments around the world could trigger another mania, which he calls the stimulus bubble.
Based on a presentation to the Thomson Reuters Market Academy, this Commentary provides a look at the mistakes of past financial bubbles, the reality of the current situation, and a dire prediction for where we could be headed.
To read the complete Commentary, click here.