I just finished reading Boomerang by Michael Lewis. As I was putting down my reflections, I was reminded of this idea from books on personal finance – every decade or so, there comes a craze where there seems to be easy money to be made. It happened with the dot com bubble, with cheap credit in Iceland, with the real estate bubble in Ireland, and numerous other examples from history. This lure of easy money results in the complete disregard of weakly held principles. Financial institutions throw away norms that have served them well for a hundred years to chase the new craze. Everyone gets caught in the insanity and the few who don’t look like fools.
The only thing that is a constant is that lows that inevitably follow are just as high as the highs that preceded it.
So, beware things that come easy. They are sure to go as easy as well.
Now let’s see how we all fare in the next bubble. :-)
A Learning a Day 