expose tulipmania 1636
TRANSCRIPT
Introduction
Alice BourgineFabrizio Di LorenzoJennifer Stephan
What does it have to do with this?
The Dutch « Tulipmania » of 1636
The World’s First Financial Crisis
What Happened in 1636?
How is the Tulipmania representative of all financial crisis?
1. It starts during a calm and prosper period– 1620-1638 : « Dutch Golden Era »– 1848 : Railwaymania: England was the first Industrial
Nation– 2003-2007 : was a very rapid growth period for the US
2. Fuelled by banking innovation and deregulation– Not all innovaton is bad– The fist « futures »– To the « subprimes » and derivatives (MBS)
3. Crisis grows though credit bubbles– Was money controlled in 1636 by gold?– Today, money is an electronic inscription : danger of credit
« If speculators could count on unlimited credit, no one could imagine the magnitudeof the crisis that would follow! » James de Rotschild, 1835
4. Blindness of Disaster and the late arrival of the States– Whistleblowers pamphlets– The administration : Firefighters and the Executioner
How is the Tulipmania representative of all financial crisis?
Representation and interpretations
A mix of two theories
• Keynesian : « animal spirit » => irrational marketguided by mimetism
• Liberalist : government and change on the regulationto blame => rational market