Edward Chancellor on the corona bubble

The language commonly used to describe speculative manias is borrowed from epidemiology. A new technology sparks a “contagion”, investors are “infected” with greed and speculative “fever” breaks out. During the panic phase, the contagion becomes more “virulent”. After the South Sea Bubble collapsed 300 years ago, contemporary observers likened the market situation to a plague. In fact, by late 1720 the bubonic plague was spreading across Europe. Today, the world is faced with another epidemic. Our response to the coronavirus pandemic resembles the inverse of a speculative mania, with fear replacing greed, and errors of pessimism potentially replacing those of optimism.

~ Edward Chancellor, "The Corona Bubble," March 2020

(Appears in Marc Faber's Market Commentary, April 1, 2020.)