The seeds of the next financial crisis are sown during periods of euphoria from "summary" of A Short History of Financial Euphoria by John Kenneth Galbraith
The experience of a financial euphoria is a recurring theme throughout history. It is characterized by a feeling of collective optimism and a belief that the good times will never end. This euphoria is often fueled by a speculative frenzy, where individuals and institutions alike rush to capitalize on the perceived opportunities in the market. During these periods, caution is thrown to the wind, and risk-taking becomes the norm. However, what many fail to realize is that the seeds of the next financial crisis are sown during these very moments of euphoria. The excessive risk-taking, overleveraging, and disregard for warning signs all contribute to the buildup of vulnerabilities within the financial system. As asset prices become increasingly detached from their intrinsic value, the bubble eventually bursts, leadin...
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