Excellent book. The high point for me was the enterprising fellow who set up a stall in London during the South Sea Bubble (the original bubble!), allowing people to invest in "An undertaking of great advantage, but nobody to know what it is." People lined up for a couple of days to give the fellow their money...after which the fellow disappeared, never to be seen again. No lies detected!
This is a fun book, but it famously embellishes, exaggerates, and sensationalizes the tulip bubble [1]. The efficient markets people obviously don't like the story, but there doesn't seem to be much evidence that it happened on the same scale that Mackay portrays it.
Yes a lot of it was based on anti tulip propaganda pamphlets that circulated at the time, and survived more because they were more interesting due to the exaggerated stories.
Along similar lines, the economist John Kenneth Galbraith has a book on financial bubbles and irrational crowd mentalities in financial market over the centuries: A Short History of Financial Euphoria [1]. Short, approachable, and interesting.
My intro to psychology classes was one of the most valuable classes I ever took, just with the way it systematically shattered my own notion of how much I could trust my own notions of perception and thought to be a rational and accurate reflection of reality. I definitely had a notion of how irrational “people” could be before that, but of course I somehow thought I was above all that.
Human beings are rational animals as such, but our exercise of that rationality can be quite weak and subject to character flaws and bad habits, and requires cultivation to refine, purify, and actualize.
Of course, we also must be careful here because you're using your own faculties to judge the content of the psychology class (as were the psychologists who produces the content you were learning). Skepticism falls into special pleading, because in order to take a skeptical stance toward the human intellect as such, one must somehow transcend the human intellect to be able to make those sorts of judgements [0].
I would also not say that we are inherently and constitutionally irrational. I would say rather - to use the old cliche - that the intellect's facility is like a muscle that needs to develop, to grow, and to be conditioned to become strong. I would also say that some have greater capacity and potential on constitutional grounds.
Furthermore, the cultivation of virtue is essential, as errors of reasoning are shaped by our vices and not just cognitive limitations or whatever. Indeed, the more intellectual power someone has, the more essential virtue becomes, lest the intellect destroy itself with rationalizations and abuse [1].
[0] Of course, what constitutes correct reasoning is a teleological matter. Otherwise, there is no reason to favor one conclusion over another or any conclusion at all.
[1] A coward of high intelligence will the rationalize powerful. In Chomsky's view, for instance, the overwhelming majority of intellectuals have historically acted as servants of power, rationalizing the status quo, and manufacturing consent. Or as Adam Zamoyski said pithily when discussion Napoleon's relationship with French intelligentsia, intellectuals are mostly tarts for power.
This is a common takeaway from Intro to Psychology but unfortunately it's just...not very true to life (or to psychological science).
It's a fault of us psychologists. The most interesting studies are those that are surprising, so that's what psychology classes are packed with. But we should know better, because that's just selection bias in action. Historically, this has led to intro courses consisting of 50%+ irreproducible studies.
But even after the reproducibility crisis cleanup, the selection bias still remains in place. There aren't a ton of fun studies about the typical accuracy of perception or how humans are often quite thinking and rational.
Speaking of which, I noticed that the big market reversal during the beginning of the Iran war happened right around when ESLR requirements were due to relax. Is this a transmission mechanism for that? Did some of the big brokerages run a big promotion (0% APR on margin debt!) or something?
That chart (and many from FRED) is unfortunately not useful without viewing it on a logarithmic scale. Things can look quite parabolic in a linear space, but exponential growth is quite normal in many financial contexts.
Click "edit graph" and change units to "natural log". Now look again. You'll see that the growth in margin loans is absolutely normal, and actually has only recently recovered from the dip caused by the 2008 financial crisis.
No, but it is about the, very expected, shitshow caused by the AI hype. When companies think cramming AI in any random place is a magic bullet for replacing workers, shit breaks. Because AI is dumb af. LLMs are just the shittiest of the ways to do it.
Do you honestly think this particular "cram AI in everything" isn't related to the current AI hype? Or that AI applications and companies providing things like this won't crash right along with the general llm AI hype and leveraged investments?
Nah, the kind of AI they were using has been around for a long time (AlexNet is 13 years old), and before that they would have used classical computer vision.
The only thing that happened here is that they didn't check it worked before firing everyone. That can happen with any automated system, AI or not.
I am referring to the hype causing it to be adopted now instead of a decade ago, not the specific implementation. The hype causing people to adopt AI of all kinds hastily without proper validation.
Interestingly, Charles Mackay, the author of Extraordinary Popular Delusions and the Madness of Crowds, was himself one of the most ardent cheerleaders for the Railway Mania [0] "urging people to put their money into the railways and pooh-poohing those who were concerned." and "He had become famous by mocking the bubbles of the past - but had rather less to say about the far more serious bubble that he himself had helped to inflate."[1]
[1] https://en.wikipedia.org/wiki/Tulip_mania#Modern_views
[1] https://www.goodreads.com/en/book/show/270746.A_Short_Histor...
Of course, we also must be careful here because you're using your own faculties to judge the content of the psychology class (as were the psychologists who produces the content you were learning). Skepticism falls into special pleading, because in order to take a skeptical stance toward the human intellect as such, one must somehow transcend the human intellect to be able to make those sorts of judgements [0].
I would also not say that we are inherently and constitutionally irrational. I would say rather - to use the old cliche - that the intellect's facility is like a muscle that needs to develop, to grow, and to be conditioned to become strong. I would also say that some have greater capacity and potential on constitutional grounds.
Furthermore, the cultivation of virtue is essential, as errors of reasoning are shaped by our vices and not just cognitive limitations or whatever. Indeed, the more intellectual power someone has, the more essential virtue becomes, lest the intellect destroy itself with rationalizations and abuse [1].
[0] Of course, what constitutes correct reasoning is a teleological matter. Otherwise, there is no reason to favor one conclusion over another or any conclusion at all.
[1] A coward of high intelligence will the rationalize powerful. In Chomsky's view, for instance, the overwhelming majority of intellectuals have historically acted as servants of power, rationalizing the status quo, and manufacturing consent. Or as Adam Zamoyski said pithily when discussion Napoleon's relationship with French intelligentsia, intellectuals are mostly tarts for power.
https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow
It's a fault of us psychologists. The most interesting studies are those that are surprising, so that's what psychology classes are packed with. But we should know better, because that's just selection bias in action. Historically, this has led to intro courses consisting of 50%+ irreproducible studies.
But even after the reproducibility crisis cleanup, the selection bias still remains in place. There aren't a ton of fun studies about the typical accuracy of perception or how humans are often quite thinking and rational.
Speaking of which, I noticed that the big market reversal during the beginning of the Iran war happened right around when ESLR requirements were due to relax. Is this a transmission mechanism for that? Did some of the big brokerages run a big promotion (0% APR on margin debt!) or something?
Click "edit graph" and change units to "natural log". Now look again. You'll see that the growth in margin loans is absolutely normal, and actually has only recently recovered from the dip caused by the 2008 financial crisis.
Do you honestly think this particular "cram AI in everything" isn't related to the current AI hype? Or that AI applications and companies providing things like this won't crash right along with the general llm AI hype and leveraged investments?
The only thing that happened here is that they didn't check it worked before firing everyone. That can happen with any automated system, AI or not.
https://spinchange.github.io/memoirs-of-extraordinary-popula...
[0] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1927396
[1] https://www.bbc.com/news/business-51311368