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Tulip mania: when a single flower was worth more than a house (2025)

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Re: Tulip mania: when a single flower was worth more than a house (2025)

#71

Post by watwut »

somenameforme wrote: post #38
watwut wrote: post #18

Earlier quoted context omitted.

People in the bubble typically know they are in the bubble. They do not know when to get out. The "even if you didn't make a profit then you'd stand an even more reasonable chance of getting out with fairly minimal losses" is the thing people are wrong about - once bubble is popping, only fastest few can react fast enough.

Is this true though? Take NFTs for again the latest contemporary example - that bubble has obviously long since popped, but those ape NFTs still trade for ~$20k with daily volume in the hundreds of thousands, and a lot of people made a lot of money off it all, some probably still are. At their peak they sold for millions of dollars, but that's on the extreme fringe end. Most traders literally can't afford the heights…

That is what I took from economy history and from what economists wrote on the topic. That past bubbles we recognized as bubbles were known to contemporaries. They wrote articles about the situation being a bubble, they knew.

> Take NFTs for again the latest contemporary example - Most traders literally can't afford the heights of bubbles, or anywhere near them, which largely limits the breadth of massive losses.

I dont know whether you could have use your NFT "investment" as a collateral for mortgage or it shown up in company sheet etc. Honestly, I don't know who were traders of NFT in the first place. I think that all in all, NFT were kind of a fringe thing for super rich basically gamblers.

What you do actually get with crypto or stocks or in retail futures trading are people who have put all their money into that stuff. Or even took debt to put their money in. So, they are loosing all of that. Or, they invested into funds that buy that stuff - you invest whatever you have, those money join other peoples money and suddenly fund can buy it. And the last point is important, because some of those funds are things like pension funds who invest into certain stuff automatically.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#72

Post by PunchyHamster »

ck2 wrote: post #30

ah there's a good term so "AI" mania ("AI" derangement syndrome?) when ram and storage starts to cost as much as rent or a car eventually now we just wait for the bubble collapse and lots of cheap hardware even if slightly used

sadly the AI it produces despise the overhype is still way more useful than tulips. I don't think bubble burst would get us to RAM prices pre-boom for a while

Re: Tulip mania: when a single flower was worth more than a house (2025)

#73

Post by jbverschoor »

brap wrote: post #37
iambateman wrote: post #33

Maybe we should update our lexicon to "NFT mania" –– far more people lost money in that phenomenon.

At least in the tulip case, they actually had some minor value. You owned a pretty flower. You could also make the case for crypto money, I guess. Any person with common sense and basic technical understanding could tell you NFTs were an incredibly dumb and useless idea from the very start. All you “own” is an entry on some ledger, which doesn’t inherently give you ownership over anything else.

No different than the us dollar, except for the fact that the dollar is backed by armed forces, which is paid by us dollars....

Re: Tulip mania: when a single flower was worth more than a house (2025)

#74

Post by rithdmc »

kaon_2 wrote: post #62
Hilliard_Ohiooo wrote: post #41

Earlier quoted context omitted.

So many of these articles get it completely wrong. Economically. People weren't going crazy for tulips just because, the government had incentivized investment in tulips. The government at the time basically told people that they could not lose money on investing tulips. It should be a story about governments misallocating resources. That's it, but people quit. Keep twisting it into a story of psychology and mania wh…

Does it make sense to talk about "the government" in this age? It probably misguides us more than informs us. I've always felt the perception of government at the time is closer to our perception of the captain of the local football team - at best distant and upholding the honor of the village, at worst a thief with a title - rather than how we view it today. Authority of information lay with the church. Maybe replac…

I wonder what the crossover or relationships between the two - Persons of wealth in positions of power and the church - was here at the time.

In Ireland, for as long as it has existed with its own government, the two have been pretty heavily intertwined.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#75

Post by JCTheDenthog »

jMyles wrote: post #57
brap wrote: post #37

Earlier quoted context omitted.

At least in the tulip case, they actually had some minor value. You owned a pretty flower. You could also make the case for crypto money, I guess. Any person with common sense and basic technical understanding could tell you NFTs were an incredibly dumb and useless idea from the very start. All you “own” is an entry on some ledger, which doesn’t inherently give you ownership over anything else.

I'm not really convinced that people thought there was "anything else", it's just that people thought that the entry on the ledger was going to increase in value, even from some of the stupifying initial values. I own several NFTs that are important to me, and they're worth every penny I paid. I never had any illusions that I owned anything other than a historical footnote; I think that this sort of ownership is mean…

>I own several NFTs that are important to me, and they're worth every penny I paid.

The problem with the NFTs is that you don't actually own the art they represent and have zero copyright claim to them. In the absolute very best of cases, if you squint hard enough, you could see them as roughly equivalent to the signature of the original creator of the work of art and you're effectively buying a signed digital print of the work. In the worst and more common cases, you're buying nothing at all except a hash on a blockchain.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#76

Post by jeroenhd »

Hilliard_Ohiooo wrote: post #41
silotis wrote: post #14

The brief mention that the fallout wasn't as disastrous as myth would have it greatly understates just how exaggerated the popular account of tulip mania is. https://www.smithsonianmag.com/history/there-never-was-real-...

So many of these articles get it completely wrong. Economically. People weren't going crazy for tulips just because, the government had incentivized investment in tulips. The government at the time basically told people that they could not lose money on investing tulips. It should be a story about governments misallocating resources. That's it, but people quit. Keep twisting it into a story of psychology and mania wh…

The "government" didn't do much at all, there was no real oversight or guarantee like there is today. The whole concept was novel at the time so there was no law and there were no real procedures. The Dutch Republic may not have had an official king, it also sure wasn't a democracy with real, independent institutions or anything like that. The country was led by a democracy-lite system of nobility/rich people that feels a lot like how early American voting worked (but divided even less evenly).

The closest thing to an involved government wasn't really in favour of trading in immaterial goods at all. Something close to government intervention did happen in one of the two involved government systems after the bubble popped, but it was effectively unratified and useless (the local equivalent of a supreme court even ruled that the government couldn't interfere with the tulip trade).

The entire thing was just a club of a few hundred relatively rich people throwing themselves at a bubble. Most people didn't have the means or money to participate.

The "mania" name is an insult to those who partook as much as it described the trade bubble. It's not related to the modern psychological definition of "mania" that came much later.

Re: Tulip mania: when a single flower was worth more than a house (2025)

#77

Post by altruios »

JKCalhoun wrote: post #27
xnorswap wrote: post #8

Earlier quoted context omitted.

That logic has a glaring flaw, that while tulips might be in short supply, the price is driven by everyone else doing that too, so there'll be a glut of new blubs in the future, so the future price shouldn't be assumed to be the current price. Anything self-replicating can't hold to "current price best predicts future price".

The Hunt Brothers (re)learned this with silver in the 70's. (80's?)

what happened with the silver rule 7 is different from the tulip craze.

Hunt brothers buy a bunch of silver, lots on margin (bank borrowed), government saw what was happening and literally changed the rules of the market to force them to mass liquidate when they couldn't meet a margin call (all of the sudden). https://en.wikipedia.org/wiki/Silver_Thursday

Re: Tulip mania: when a single flower was worth more than a house (2025)

#78

Post by some_random »

renegade-otter wrote: post #60
dalben wrote: post #53

Earlier quoted context omitted.

NFTs

I think NFTs were this niche thing only crypto people were dealing. It was not a wide cultural phenomenon. I bet the majority of the population don't know what it is.

I'm not sure if I'd call it culture wide, but a significant number of non-tech people in my life were not just aware of it but actively considering "investing".

Re: Tulip mania: when a single flower was worth more than a house (2025)

#79

Post by dotcoma »

vmg12 wrote: post #59
brap wrote: post #37

Earlier quoted context omitted.

At least in the tulip case, they actually had some minor value. You owned a pretty flower. You could also make the case for crypto money, I guess. Any person with common sense and basic technical understanding could tell you NFTs were an incredibly dumb and useless idea from the very start. All you “own” is an entry on some ledger, which doesn’t inherently give you ownership over anything else.

Using your reasoning a large number of collectible items should be worthless. What really makes an NFT different from a Pokemon card, a Birkin bag, or even an original Monet? My guess is that the seller has to have some sort of authority and established reputation for these kinds of artificially scarce luxury goods to maintain value.

I'm not sure, but I know I'd rather own a Monet than a Bored Ape Yacht Club NFT ;)

Re: Tulip mania: when a single flower was worth more than a house (2025)

#80

Post by vmg12 »

hsartoris wrote: post #69
vmg12 wrote: post #59

Earlier quoted context omitted.

Using your reasoning a large number of collectible items should be worthless. What really makes an NFT different from a Pokemon card, a Birkin bag, or even an original Monet? My guess is that the seller has to have some sort of authority and established reputation for these kinds of artificially scarce luxury goods to maintain value.

> Using your reasoning Clearly not, the point being made was that you owned a thing, e.g. a Pokemon card. To own an NFT is to, bafflingly, claim to hold a token of ownership of some asset represented by the NFT - where that representation is indicated by the NFT immutably containing, typically, a thoroughly mutable Google Drive link to a picture. The whole thing was always farcical. Again, at least you actually own t…

The value of pokemon cards or birkin bags is not because they are physically owned. This should be obvious from the fact that I could cheaply reproduce them and my identical reproductions would have 0 value compared to the original. I still own them though so again, according to your reasoning they should have the same value.

Some pokemon cards are worth so much i could reproduce them with gold instead of cardboard and it would be worth less than the cardboard version (assuming the same weight)

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