Of Buildings, Bubbles, And Babel: The Secret Of Predicting Meltdowns
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Online Investing AI is built around the concept that by eliminating greed and fear, advanced technology can better predict market moves. Imagine my dismay, then, when I discovered a far simpler way of predicting market meltdowns without any technology at all!
It doesn’t need AI, or any other form of advanced technology. You just need to check headlines every once in a while to read about building projects around the world.
Here’s the secret: whatever country is bragging about constructing the biggest building has the biggest potential for a bubble. I call this Big-Building-Bubble-Burst (0r 4B) theory.
Let me explain how I discovered this secret.
The secret revealed itself most recently in the Dubai World implosion. The company, which is 100 percent owned by the emirate of Dubai’s government, won’t be able to meet $60 billion or so debt payments.
Dubai was recently involved in a project to build the world’s tallest building.
Dubai is home to the world’s biggest shopping mall – the 1,200-shop Dubai Mall – and will have the world’s tallest building when the 160-story Burj Dubai is completed next year at an estimated cost of US$1 billion
Remember Malaysia?
In the 1990s Malaysia and Singapore both went on a world’s-tallest-buildings binge. The Petronas Twin Towers in Kuala Lumpur were the world’s biggest buildings until 2004. The building project was completed in the 1990s.
In 1997, the Asian currency crisis swept up both of those countries.
Is this a coincidence? Perhaps.
But it may be that financial hubris manifests itself in several ways: an ignorance of sound economic policy and a desire to create massive temples to commerce that turn into nothing more than financial towers of economic Babel.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
