They say those who forget the lessons of history are doomed to repeat them.
The cycle swings fear back to greed. The overcautious become the overzealous. And at the top, the story is always the same: Too much credit, too much speculation, the suspension of disbelief, and the spread of the idea that this time is different.
The stock bubble continued along merrily in spite of the rising rates, as the fad of chasing the latest hot stock captured the public’s imagination. That Fed tightening of the late 1920s is obviously not what is happening now, but yet the pattern is nearly the same. This point suggests that it is not the “usual suspects” that are the driving force behind creating price structures. Something else must be the causative agent.