econjunkie

Predicting the Next Great Bubble

Triple G:

First, "maximum price" is not necessarily the equilbrium price. Short supply and/or excess demand relative to it can push the price up and make it greater than the equilibrium price in the short-run.

Second, the term "maximum price" is misleading as you are not necessarily maximizing profit. If there is any variation in agents' willingness to pay, you can just sell to that/those agent(s) and earn said price without optimizing your profit function. The highest profit margin might also not exist at equilibrium (Ex. a market that is not perfectly competitive).

On Jul 01 08:59 AM TripleG wrote:

> I'd have to disagree with most of this article and especially George
> Soros. Bubbles are real. They have happened and will continue to
> happen because they are built into the DNA of the capitalist infrastructure.
>
> We are all trained, as MBAs, to ride a profit margin to it's point
> of maximum profit (and then bail out). Economists call it, the point
> of equilibrium where Price = Maximum P.

Tuesday Outlook: Commodities, Global Markets

Mad Hedge Fund Trader: Copper as a future predictor of economic activity can't be beat.

How do you get there? The 4.10 peak happened during a recession. So, was it a predictor of a recession? No. Your thesis is baseless. Where are the empirics that support your claim? Please support your statement.