Friday’s WSJ front page article, Bernanke’s Bubble Laboratory, is must reading:

"First came the tech-stock bubble. Then there were bubbles in housing
and credit. Chinese stocks took off like a rocket. Now, as prices soar
on every material from oil to corn, some suggest there’s a bubble in

But how and why do bubbles form? Economists traditionally haven’t
offered much insight. From World War II till the mid-1990s, there
weren’t many U.S. investing manias for them to look at. The study of
bubbles was left to economic historians sifting through musty records
of 17th-century Dutch tulip-bulb prices and the like . . .

Now, the
study of financial bubbles is hot . . . Among their conclusions:

Bubbles emerge at times when investors profoundly
disagree about the significance of a big economic development, such as
the birth of the Internet. Because it’s so much harder to bet on prices
going down than up, the bullish investors dominate.

Once they get going, financial bubbles are marked by huge increases in trading, making them easier to identify.

Manias can persist even though many smart people
suspect a bubble, because no one of them has the firepower to
successfully attack it. Only when skeptical investors act
simultaneously — a moment impossible to predict — does the bubble pop."

Its now at the free section of WSJ.com.


Bernanke’s Bubble Laboratory
Princeton Protégés of Fed Chief Study the Economics of Manias
WSJ, May 16, 2008; Page A1

Category: Investing, Markets, Mathematics, Psychology

The Recession Buy Indicator

Category: Contrary Indicators, Economy, Investing, Markets, Psychology, Quantitative

Copyright, Links, Fair Use & Reproduction

Category: Legal, Weblogs

Life = Risk

Don’t be put off achieving your destiny, even if you have experienced failure in your life. This video mentions well known people who had failed, but kept pressing on until they became successful.

Category: Psychology, Video

New Wicki Critical of Pundits & Celebrities

Category: Web/Tech

Estimated Relative Standard Errors in Housing Data

Category: Data Analysis, Mathematics, Real Estate

Confessions of a Short Seller

Category: Psychology, Short Selling, Trading, Valuation

Friday Evening Jazz: Marvin Gaye

Marvin_gaye_in_1973 Last week, while randomly channel surfing, I stumbled across a fantastic PBS documentary in the American Masters series, titled Marvin Gaye: What’s Going On.

It was a terrific review of the wonderful music and troubled life of Marvin Gaye.

Those of you who are less familiar with early Soul and R&B owe it to yourself to learn a bit about Gaye, best known as an artist on the Motown record label in the 1960s and 1970s.

Master_19611984Gaye had a classic R&B voice — described as "edged with grit yet tempered with sweetness." But he was much more than that: He was Motown’s renaissance man: A songwriter, composer, multi-instrumentalist, and record producer as well.

AllMusic: "Moving from lean,
powerful R&B to stylish, sophisticated soul to finally arrive at an
intensely political and personal form of artistic self-expression, his
work not only redefined soul music as a creative force but also
expanded its impact as an agent for social change."

You can explore Gaye’s work a couple of ways: The one click method is
either a box set or a Best Of. For the big 4 CD box, go with The Master 1961-1984. A less exhaustive approach is Every Great Motown Hit of Marvin Gaye.

Whats_going_on I much prefer the albums over the greatest hits, The self-produced What’s Going On was a landmark effort, described as "a dramatic shift in both content and style that forever altered the face of black music."  A mix of percussion, soul and jazz, it has a remarkably sophisticated and fluid sound. Reviewers have called What’s Going On a conceptual masterpiece.

The long-simmering eroticism implicit in much of Gaye’s work reached its boiling point with 1973′s Let’s Get It On, one of the most sexually charged albums ever recorded; a work of intense lust and longing, it became the most commercially successful effort of his career


Top Ten Albums
Lets_get_it_on1971: What’s Going On (#6 U.S.)
1973: Let’s Get It On (#2 U.S.)
1973: Diana & Marvin (#5 UK)
1974: Marvin Gaye Live! (#8 U.S.)
1976: I Want You (#4 U.S.)
1977: Live at the London Palladium (#3 U.S.)
1982: Midnight Love (#7 U.S.; #10 UK)
1994: The Very Best of Marvin Gaye (#3 UK)
2000: Marvin Gaye Love Songs (#8 UK)


Recommended Albums

What’s Going On
Let’s Get It On
The Master 1961-1984 (Box Set)   

• NPR: A Tribute to Marvin Gaye    


videos after the jump

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Category: Friday Night Jazz, Music, Video

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Category: Investing, Markets, Podcast, Technical Analysis

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Category: Consumer Spending, Economy, Taxes and Policy