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investorsspeculators are buying shares on broker credit

Is this something new, like the result of some deregulation?

What I mean is that there was the dot-com bubble when worthless stocks were sold with "knowledge economy" mumbo-jumbo; then there was the subprime mortgage/derivates bubble when mortgages with little hope of repayment were re-packaged to be sold as the safest investment around; what's the biggest Ponzi scheme this time?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon May 19th, 2014 at 01:19:12 PM EST
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Is this something new ...

Not really.  Mr. Market has once again decided This Time It's Different©.  In my view because corporations, etc., are sitting on whacking great Piles O' Cash and haven't a clue what to do with it.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon May 19th, 2014 at 01:23:38 PM EST
[ Parent ]
Mr. Market has once again decided This Time It's Different©

But if it's not broker credit, then what's the trick this time? What new story they tell investors to convince them that This Time It's Different? What's the biggest latest "financial innovation"?

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Mon May 19th, 2014 at 02:21:15 PM EST
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I can't believe anyone thinks It's Different This Time. What they think is that there's a heap of money to be made in this bull run, and they're smart enough to get out in time.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 19th, 2014 at 02:38:38 PM EST
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speculators are buying shares on broker credit

Is this something new, like the result of some deregulation?

You should really read John K. Galbraith's The Great Crash, 1929. It's a short little book.

I mean, blowing bubbles is what "market participants" do...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon May 19th, 2014 at 06:38:10 PM EST
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From the chapter The Twilight of Illusion in The Great Crash:

(Sorry about the readability, there still seems to be a 600px limit on image height...)

by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 20th, 2014 at 02:17:56 AM EST
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No need to posit financial innovation or new Ponzi schemes in order to explain a margin-loan-fuelled bubble.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Tue May 20th, 2014 at 06:08:28 AM EST
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