That's funny, I traded AIS once too...those guys also shorted LDP right before it took off earlier in the year, that's how I first found the site. Nowadays, they are still playing the same game but don't realize the rules have changed
They are true believers. I think a lot of it has to do with ideology. Well, maybe some of it. They are all free market libertarians and believe that the economy and market will always trend up no matter what. Boom and busts are the fault of outside forces - Greenspan, the election. Thus any set back is a buying opportunity. The free market left to itself will bring limitless growth without pause, the elimination of parachial culture and nations, and world peace.
Free market capitalism, just like Communism, is a religion. It is a belief system based upon faith. Thus their faith matches their hopes that this is the final bottom.
My background is history and one of thing that has always interested me is the connection between the life cycle of civilizations and economic boom and bust cycles. Oswald Spengler, Carroll Quigley, Arnold Toynbee etc. The US for example has had multiple boom and bust periods. Anyone who understood past manias could see this coming, but like all the ones in the past people believed ideology and hope and thought this time would be different. Whats the saying, history doesn't repeat it rhymes.
The Free Market nuts, just like the Communists, believe that their economic and social order is the highest stage of history and are in fact "The End of History". Thus it is possible for people like Gilder to believe that the business cycle has been ended and it is just going to be one long continious boom.
There are also plenty of financial history books - Devil Take the Hindmost being one of the most recent that show that all of these booms end in disaster. So that's what we are going through now. A lot of people's fantasies are going to have to be adjusted to reality. Ironically the free markets often believe in a soft form of social darwinism and they are among the first to be completed wiped out. |
