It happened again.
I promised myself that I wouldn’t do it, but I was fooled once more.
Let me explain:
Periodically, I go around the country and deliver a Austrian economic message.
On my most recent journey, I arrived at my departure gate, and sat down, ready to read about world events on my iPod.
Then it happened.
The husband said to the wife, “This time, it’s different. I know, I know, but this time it’s different.”
It piqued my curiosity and I couldn’t help but to hear more.
“O.K., he said, so I bought those dot-com stocks in February 2000. I really thought the stock market was going to run a lot further to the upside. Those two houses and condo we bought in 2006 with borrowed money from our home equity loan and credit cards, who could have seen that coming? Didn’t T. Boone Pickens say oil was going to $200 from $145, where we got in? And the stock market in 2007, full-bore on margin. Oh, well.”
I was about to jump into the conversation when she said, “Honey, I know it seems so stupid now, but it seemed so right at the time.”
I thought to myself, at least you folks are learning.
Extreme sentiment and stock market bubbles always seem right at the time. After all, the math is easy to follow, and who are we to argue with Cramer and the rest of the sell-side crowd. But argue we must, or lose we shall.
She went on, “Unemployment keeps rising, foreclosures keep coming, there’s a major crisis in Japan, at that Libyan thing is going on.”
Converts I thought, a breakthrough has been made. I was so proud, and I hadn’t even said a word.
Then it happened.
“But do you really think we should invest everything we have into emerging markets?”
Absolutely, he said. “This time it’s different! I can feel it.”
Then I heard my boarding call.
Gathering my belongings, I boarded the plane, shaking my head in complete disbelief. Once again, I was fooled into believing that people can change.
This time is different.
Yeah, right! Now, my bubble's burst.