Ben,
Agreed about the probabilities.
A mania may not be objectively defined, so I guess any discussion there is subjective at best and idiosyncratic at worst, hence I will pass. However, either all manias do not end in crashes, or they do, but manias are rare to start with, as crashes are rare.
Note, however, that the 1929 post-crash depression was largely a creation of the then Fed, and there was none in 1987 as the Fed acted sensibly. That further lowers the probability of a post-crash depression following a mania, if indeed detected.
-BGR. |
