Bubble: Difference between revisions

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imported>Doug Williamson
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Bubbles are market conditions in which prices are greatly in excess of 'fundamental' valuations.
Bubbles are market conditions in which prices are greatly in excess of 'fundamental' valuations.


The bubble is likely to burst at some future point, with a rapid fall in market prices.
The bubble is likely to burst at some future point, with a rapid fall in market prices.
It can often be difficult to detect the existence of a bubble before it has burst.
:<span style="color:#4B0082">'''''False presumption delayed effective action'''''</span>
:"The prudential apparatus has worked in the past on the presumption that all movements in asset prices were based on fundamentals.
:This approach may prevent supervisors from dealing with excessive procyclicality until it is too late.
:The existence of bubbles, for instance, is impossible to prove until they burst.
: And, at least in the initial phase of a bubble, there is no lack of "fundamental" explanations for observed movements in asset prices."
:''Jean-Pierre Landau, Deputy Governor of the Bank of France, BIS Review 94/2009.''




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* [[Efficient market hypothesis]]
* [[Efficient market hypothesis]]
* [[Fundamental analysis]]
* [[Fundamental analysis]]
* [[Herd behaviour]]
* [[Mean reversion]]
* [[Mean reversion]]
* [[Overshooting]]
* [[Overshooting]]
* [[Procyclicality]]
* [[Random walk]]
* [[Random walk]]
* [[Rational expectations]]
* [[Rational expectations]]
* [[Speculation]]
* [[Speculation]]
* [[Supervisor]]
* [[Systemic risk]]
* [[Systemic risk]]
* [[Trend]]
* [[Trend]]
* [[Volatility]]
* [[Volatility]]


[[Category:Knowledge_and_information_management]]
 
==Other resource==
*[https://www.bis.org/review/r090805d.pdf Procyclicality - what it means and what could be done - Jean-Pierre Landau, Deputy Governor of the Bank of France, BIS Review 94/2009]
 
[[Category:The_business_context]]
 
[[Category:The_business_context]]
[[Category:The_business_context]]

Latest revision as of 23:47, 21 November 2023

Bubbles are market conditions in which prices are greatly in excess of 'fundamental' valuations.


The bubble is likely to burst at some future point, with a rapid fall in market prices.

It can often be difficult to detect the existence of a bubble before it has burst.


False presumption delayed effective action
"The prudential apparatus has worked in the past on the presumption that all movements in asset prices were based on fundamentals.
This approach may prevent supervisors from dealing with excessive procyclicality until it is too late.
The existence of bubbles, for instance, is impossible to prove until they burst.
And, at least in the initial phase of a bubble, there is no lack of "fundamental" explanations for observed movements in asset prices."
Jean-Pierre Landau, Deputy Governor of the Bank of France, BIS Review 94/2009.


See also


Other resource