Re:Netflix's Junk Bonds Explain How We Are in a Corporate De...
by oblio on Tuesday February 04, 2020 @07:20AM
(#22234711)
Because the economic theory behind bubbles is solid and easy to understand:
1. resources are not infinite
2. human creativity is basically boundless, but it needs time
3. humans tend to think alike and to get excited about the same things at the same time
We find a better way to manage resources, everybody hopes it will cure cancer, provide world peace, etc. As a result investment skyrockets, the "new way" develops and helps everyone but inevitably it doesn't do everything people investing a lot of money were hoping it would do. So people pull their money back and get scared when they realize how much they risked. People spend less money and things enter a downward spiral.
1. resources are not infinite
2. human creativity is basically boundless, but it needs time
3. humans tend to think alike and to get excited about the same things at the same time
We find a better way to manage resources, everybody hopes it will cure cancer, provide world peace, etc. As a result investment skyrockets, the "new way" develops and helps everyone but inevitably it doesn't do everything people investing a lot of money were hoping it would do. So people pull their money back and get scared when they realize how much they risked. People spend less money and things enter a downward spiral.