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What Do YOU know..!

July 30, 2010

Gosh, I just heard from cobber Deng @ National Uni in Singapore(Real Estate prof.).. goes something like..

China is experiencing spectacularly fast growth – so fast that many fear it is driven by a bubble – a property bubble to be precise. Recent memories of what happened when the US housing market bubble burst make the possibility of a Chinese housing bubble a critical concern for the world economy…

Financial bubbles are governed by something like the economic equivalent of physics Heisenberg’s uncertainty principle. It is impossible to observe a bubble with certainty without actually altering the bubble itself. If people knew it was a bubble, it wouldn’t be a bubble – it would have already collapsed. It would not, however, be impossible to envision “diagnostic tests” that would provide a probabilistic identification of a bubble…

… and so on.

Do YOU fancy I’ll hear back on the query about his picking up the Heisenberg thingy from kimalot, which as I seem to recall was quite a lot of talk a wee while back… and – to a certain chagrin – base to a broad discourse on general uncertainty..

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