Laughter–the Worst Med­i­cine

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Like many com­men­ta­tors, I regard August 9 2007 as the start of the “Global Finan­cial Cri­sis”. On that day, BNP Paribas declared that sev­eral of its funds were being closed because liq­uid­ity in those mar­kets had com­pletely evap­o­rated:


So I was par­tic­u­larly amused–in a sick sort of way–to see this bril­liant info-graphic on The Fed on Twit­ter today: it plots the amount of laugh­ter in FOMC meet­ings between 2000 and 2012. “Peak Laugh­ter” occurred lit­er­ally days before the cri­sis began:


Laugh­ter, it is often said, is the best med­i­cine. But that’s only when you know what ails you. If you are guided by igno­rance, as the Fed was (and still is) by main­stream equi­lib­rium-obsessed, non-mon­e­tary eco­nom­ics, laugh­ter is a sign of delu­sion.

The laughs plum­meted in the next few days–from eighty on June 28 to forty on August 7, and then just one on August 10, the day after BNP made its statement–as real­ity punched the FOMC in the guts.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • twowith­inthree­thati­sone

    There are actu­ally two types of laugh­ter. The nat­ural laugh­ter that is actu­ally a release and effects a momen­tary state of grace/flow, and the over­ween­ing laugh­ter of the pride­ful and tem­po­rally damned. The lat­ter is what you accu­rately refer to.

  • Bhaskara II

    Taleb and Schiller video. I only saw the first half and it was funny. At 18m­m20ss reduc­tion of debt is men­tioned.

  • Bhaskara II

    Also had a prob­lem with aprox­i­mately infin­ity?

    Hacker’s spelling slip foils bil­lion-dol­lar bank heist”

    At the same time, bankers in New York also alerted the Bangladeshi cen­tral bank after it reg­is­tered a seem­ingly high num­ber of pay­ment requests. In all, the stopped trans­ac­tions totalled between $850 and $870 bil­lion, accord­ing to two Bangladesh Bank offi­cials who spoke to Reuters on the con­di­tion of anonymity.”

  • Bhaskara II

    Reuters story has three zeros less.

    The trans­ac­tions that were stopped totaled $850-$870 mil­lion”