The Biology of Bubble and Crash
WHAT happens to your body when you take risks? What happens to it when you make or lose money? Economics rarely asks these questions. It tends to view the assessment of financial risk as a purely intellectual affair, involving the calculation of asset returns, probabilities and allocation of capital. It is economics from the neck up.
But to this bloodless account of decision making, I want to add some guts. Advances in neuroscience and physiology have shown that when we take risk, we do a lot more than just think about it. We prepare for it physically.
Normally, the body of a risk-taker purrs along efficiently — after all, our bodies have been crafted for the quick reactions and gut feelings we need to survive in a brutal world. But not always. Under circumstances of outrageous success or terrifying failure, our biology can overreact; and when this happens to traders and investors, they suffer an irrational exuberance or pessimism that can destabilize financial markets and wreak havoc on the wider economy.
To get an inkling of how this physiology works, consider the following scenario, in which a trader grapples with a rumor that the Fed may raise rates later that afternoon:
As 2:15 — the time of the announcement — approaches, trading on the screens dwindles. The floor goes quiet. The trader feels intellectually prepared. But the challenge he faces requires more than cognitive skill. He needs fast reactions, and energy for the hours ahead.
Consequently, his metabolism speeds up, ready to break down energy stores in liver, muscle and fat cells. Breathing accelerates, drawing in more oxygen, and his heart rate speeds up. Cells of the immune system take up position at vulnerable points of the body, ready to deal with injury and infection. And his nervous system, extending from the brain down into the abdomen, redistributes blood — constricting flow to the gut, giving him butterflies, and to the reproductive organs, since this is no time for sex — shunting it to major muscle groups in the arms and thighs as well as to the lungs, heart and brain.
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MapCrow: Travel Distance Calculator “Travel Distance calculator calculates distance and map between world cities.”
Apple is one of the oldest English words and first referred to fruit in general. It belongs to the genus Malus (about 25 species) of the family Rosaceae and is the most widely cultivated tree fruit. Apple varieties, of which there are thousands, fall into three broad classes: cider varieties, cooking varieties, and dessert varieties.- Provided by The World Almanac 2012
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Image: dendrofan/Flickr – visit Eerika’s websitefor more gorgeous orchid photos
These orchids, found in the Peruvian cloud forest, is named the Monkey Orchid for the obvious reason.
From HERE.
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Thousands in India Swallow Live Fish to Cure Asthma
The 70,000 people who converged on a stadium in southern India on Friday were not there for cricket or another sport, but for a fish—one they believe will cure their asthma. The asthma sufferers lined up to receive a remedy that requires swallowing a live sardine covered in a yellow herbal paste. Although medical experts have criticized the so-called cure, an Indian family has been providing the free remedy annually for years, claiming it was revealed to them by a Hindu saint. Those who swallow the remedy are told to eat only certain foods for 45 days.
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It’s called the SCAMANDER.
The off-road vehicle was originally envisioned by Peter Wheeler, owner of British sports car manufacturer TVR for 23 years, but he passed away before it came to fruition. So his wife and a team of engineers made sure the vehicle was eventually built, and Evo magazine had a chance to take it for a spin. Long story short, it looks like a heck of a lot of fun.
On land the Scamander can reach a top speed of 120mph, and its 300 horsepower V6 engine can push it from 0 to 60 in about eight seconds. Which is actually pretty impressive given this beast can tackle any terrain on Earth, and isn’t slowed down by even the shoreline.
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ATLANTA (AP) — The 15-year-old daughter of megachurch pastor Creflo Dollar told authorities her father choked and punched her, and hit her with his shoe during an argument over whether she could go to a party, according to a police report.
Dollar’s 19-year-old daughter corroborated most of her sister’s story, but Dollar disputed it, telling a sheriff’s deputy he was trying to restrain her when she became disrespectful. When she began to hit back, he wrestled her to the floor and spanked her, according to the police report.
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Akkad
Akkad was an ancient city and region in northern Babylonia, now central Iraq. It was founded by the conqueror Sargon around 2,300 BCE. Sargon extended the vast Akkadian Empire by uniting the city-states of Mesopotamia, and the now-extinct Akkadian language became a lingua franca of the region. After about a century, the empire declined, ushering in a dark age. Sargon’s grand capital city has not been found, and there are several theories as to the location of its ruins. Where might they be?
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Here’s a bounty that is sure to gather up all those bounty hunters and have them come to the USA.
Last week, the U.S. State Department offered a $5 million reward for information leading to the capture of Fuad Muhammad Khalaf, the leader of an al-Qaida-affiliated extremist group in Somalia. A day later Khalaf responded, by putting his own bounty on President Obama and Secretary of State Hillary Clinton. “Whoever reveals the hideout of the idiot Obama will be rewarded with 10 camels,” he reportedly said. “And whoever reveals the hideout of the old woman Hillary Clinton will be rewarded 10 chickens and 10 roosters.” Khalaf called the dollar “the camel of today,” referring to a 100-camel bounty offered for “the Prophet Mohammed.”
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To this day, I do believe he is not the man!
James Earl Ray Escapes from Prison Again (1977)
In 1967, Ray, who was serving time for armed robbery, escaped from prison by hiding in a bread truck. He remained at large until 1968, when he was captured in London following an international manhunt sparked by the assassination of Dr. Martin Luther King, Jr. Ray pled guilty to the murder and was sentenced to 99 years in prison. In 1977, he once again escaped, but this time he was recaptured within days. In 1969, Ray recanted his confession and claimed that who was responsible for King’s death?
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Tara Lipinski (Born on this day in 1982)
Lipinski is an American figure skater who, at the age of 14, won both the US and World Championships, becoming the youngest person ever to win either title. In 1998, she also became the youngest individual gold medalist in Winter Olympic history. Shortly thereafter, she launched her professional skating career, a move that was sharply criticized by some. The next year, she became the youngest person to win the World Professional Figure Skating Championships. Why did she stop skating in 2002?
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Here are the 10 most eye-roll worthy moments Paltrow has given the world:
- “I am who I am. I can’t pretend to be somebody who makes $25,000 a year.”
- I’m just a normal mother with the same struggles as any other mother who’s trying to do everything at once and trying to be a wife and maintain a relationship. There’s absolutely nothing perfect about my life, but I just try hard.”
- “I’d rather smoke crack than eat cheese from a tin.”
- “Every woman can make time [to work out] — every woman — and you can do it with your baby in the room. There have been countless times where I’ve worked out with my kids crawling around all over the place. You just make it work.”
- “I would rather die than let my kid eat Cup-a-Soup.”
- “Beauty fades! I just turned 29, so I probably don’t have that many good years left in me.”
- “When you go to Paris and your concierge sends you to some restaurant because they get a kickback, it’s like, ‘No. Where should I really be? Where is the great bar with organic wine? Where do I get a bikini wax in Paris?’”
- “We have great dinner parties at which everyone sits around talking about politics, history, art, and literature — all this peppered with really funny jokes. But back in America, I was at a party and a girl looked at me and said, ‘Oh, my God! Are those Juicy jeans that you’re wearing?’ and I thought, I can’t stay here. I have to get back to Europe.”
- “Some days I feel like everyone in my world has plugged themselves into my kidneys. I’m so tired.”
- “I think they’re the idiot people and I’m the normal person. But I don’t really go to parties where … I don’t really have drunk friends. My friends are kind of adult; they have a drink. But they hold their liquor. I think it’s incredibly embarrassing when people are drunk. It just looks so ridiculous. I find it very degrading. I think, ooh, you’re really degrading yourself right now, to be this pissed out in public.”
From HERE.
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