The global market is a slippery fish, as long as the controlling powers have a hold of it it cooperates more or less, the bigger it gets the harder it is to keep a good grip on it (and some countries are more sophisticated than others in that regard). Eventually the layers of leverage and exotic securitization make the fish too big and it slips out of the carefully and increasingly tightly modelled scenarios and panic sets in. It is always the same only this time it is the biggest fish the world's financial markets have ever dealt with. Lots of sashimi for anyone who can grab a piece at the right time.
Chinese Market Implosion
- Thread starter Spectre2007
- Start date
Herd behavior
From Wikipedia, the free encyclopedia
(Redirected from Herd mentality)
Jump to: navigation, search
Herd behavior describes how groups of individuals act together without planned direction. The term pertains to the behavior of animals in herds, flocks, and schools, and to human conduct during activities such as stock market bubbles and crashes, street demonstrations, sporting events, and episodes of mob violence.
Contents
[hide]
* 1 Herd behavior in animals
* 2 Herd behavior in human societies
o 2.1 Stock market bubbles
o 2.2 Behavior in crowds
o 2.3 Religious and political affiliations
o 2.4 Everyday decision-making
* 3 Notes
* 4 See also
* 5 References
* 6 Further reading
[edit] Herd behavior in animals
A group of animals fleeing a predator shows the nature of herd behavior. In the often cited article "Geometry For The Selfish Herd," evolutionary biologist W. D. Hamilton said each individual group member reduces the danger to itself by moving as close as possible to the center of the fleeing group. Thus the herd appears to act as a unit in moving together, but its function emerges from the uncoordinated behavior of self-seeking individuals. [1]
[edit] Herd behavior in human societies
Psychological and economic research has identified herd behavior in humans to explain the phenomena of large numbers of people acting in the same way at the same time. The British surgeon Wilfred Trotter popularized the "herd behavior" phrase in his book, The Instincts of the Herd in Peace and War (1914). In The Theory of the Leisure Class, Thorstein Veblen explained economic behavior in terms of social influences such as "emulation," where some members of a group mimic other members of higher status. In "The Metropolis and Mental Life" (1903), early sociologist George Simmel referred to the "impulse to sociability in man," and sought to describe "the forms of association by which a mere sum of separate individuals are made into a 'society.'" Other social scientists explored behaviors related to herding, such as Freud (crowd psychology), Carl Jung (collective unconscious), and Gustave Le Bon (the popular mind).
[edit] Stock market bubbles
Large stock market trends often begin and end with periods of frenzied buying (bubbles) or selling (crashes). Many observers cite these episodes as clear examples of herding behavior that is irrational and driven by emotion -- greed in the bubbles, fear in the crashes. Individual investors join the crowd of others in a rush to get in or out of the market. [2]
Some followers of the technical analysis school of investing see the the herding behavior of investors as an example of extreme market sentiment.[3] The academic study of behavioral finance has identified herding in the collective irrationality of investors, particularly the work of Robert Shiller[4], and Nobel laureates Vernon Smith, Amos Tversky, and Daniel Kahneman.
[edit] Behavior in crowds
Crowds that gather on behalf of a grievance can involve herding behavior that turns violent, particularly when confronted by an opposing ethnic or racial group. The New York Draft Riots and Tulsa Race Riot are notorious in U.S. history, but those episodes are dwarfed by the scale of violence and death during the Partition of India. Population exchanges between India and Pakistan brought millions of migrating Hindus and Muslims into close proximity; the ensuing violence produced an estimated death toll of between 200,000 and one million. The idea of a "group mind" or "mob behavior" was put forward by the French social psychologists Gabriel Tarde and Gustav Le Bon.
Sporting events can also produce violent episodes of herd behavior. The most violent single riot in history may be the fifth-century Nika riots in Constantinople, precipitated by partisan factions attending the chariot races. The football hooliganism of the 1980s was a well-publicized, latter-day example of sports violence.
[edit] Religious and political affiliations
Followers of certain religious cults and political movements have exhibited herd behavior, often involving a cult of personality. The behavior may be deliberately coordinated to some degree, but each individual follows the group in ways that clearly place health or life in peril -- religious cults of this type include the Peoples Temple in Jonestown, Heaven's Gate, and the Branch Davidians during the Waco Siege. In political movements, the dictators Adolph Hitler and Joseph Stalin relied heavily on a cult of personality.
[edit] Everyday decision-making
Benign herding behaviors may be frequent in everyday decisions, such as a person on the street deciding which of two restaurants to dine in. Suppose that both look appealing, but both are empty because it is early evening; so at random, this person chooses restaurant A. Soon a couple walks down the same street in search of a place to eat. They see that restaurant A has customers while B is empty, and choose A on the assumption that having customers makes it the better choice. And so on with other passersby into the evening, with restaurant A doing more business that night than B.[5]
From Wikipedia, the free encyclopedia
(Redirected from Herd mentality)
Jump to: navigation, search
Herd behavior describes how groups of individuals act together without planned direction. The term pertains to the behavior of animals in herds, flocks, and schools, and to human conduct during activities such as stock market bubbles and crashes, street demonstrations, sporting events, and episodes of mob violence.
Contents
[hide]
* 1 Herd behavior in animals
* 2 Herd behavior in human societies
o 2.1 Stock market bubbles
o 2.2 Behavior in crowds
o 2.3 Religious and political affiliations
o 2.4 Everyday decision-making
* 3 Notes
* 4 See also
* 5 References
* 6 Further reading
[edit] Herd behavior in animals
A group of animals fleeing a predator shows the nature of herd behavior. In the often cited article "Geometry For The Selfish Herd," evolutionary biologist W. D. Hamilton said each individual group member reduces the danger to itself by moving as close as possible to the center of the fleeing group. Thus the herd appears to act as a unit in moving together, but its function emerges from the uncoordinated behavior of self-seeking individuals. [1]
[edit] Herd behavior in human societies
Psychological and economic research has identified herd behavior in humans to explain the phenomena of large numbers of people acting in the same way at the same time. The British surgeon Wilfred Trotter popularized the "herd behavior" phrase in his book, The Instincts of the Herd in Peace and War (1914). In The Theory of the Leisure Class, Thorstein Veblen explained economic behavior in terms of social influences such as "emulation," where some members of a group mimic other members of higher status. In "The Metropolis and Mental Life" (1903), early sociologist George Simmel referred to the "impulse to sociability in man," and sought to describe "the forms of association by which a mere sum of separate individuals are made into a 'society.'" Other social scientists explored behaviors related to herding, such as Freud (crowd psychology), Carl Jung (collective unconscious), and Gustave Le Bon (the popular mind).
[edit] Stock market bubbles
Large stock market trends often begin and end with periods of frenzied buying (bubbles) or selling (crashes). Many observers cite these episodes as clear examples of herding behavior that is irrational and driven by emotion -- greed in the bubbles, fear in the crashes. Individual investors join the crowd of others in a rush to get in or out of the market. [2]
Some followers of the technical analysis school of investing see the the herding behavior of investors as an example of extreme market sentiment.[3] The academic study of behavioral finance has identified herding in the collective irrationality of investors, particularly the work of Robert Shiller[4], and Nobel laureates Vernon Smith, Amos Tversky, and Daniel Kahneman.
[edit] Behavior in crowds
Crowds that gather on behalf of a grievance can involve herding behavior that turns violent, particularly when confronted by an opposing ethnic or racial group. The New York Draft Riots and Tulsa Race Riot are notorious in U.S. history, but those episodes are dwarfed by the scale of violence and death during the Partition of India. Population exchanges between India and Pakistan brought millions of migrating Hindus and Muslims into close proximity; the ensuing violence produced an estimated death toll of between 200,000 and one million. The idea of a "group mind" or "mob behavior" was put forward by the French social psychologists Gabriel Tarde and Gustav Le Bon.
Sporting events can also produce violent episodes of herd behavior. The most violent single riot in history may be the fifth-century Nika riots in Constantinople, precipitated by partisan factions attending the chariot races. The football hooliganism of the 1980s was a well-publicized, latter-day example of sports violence.
[edit] Religious and political affiliations
Followers of certain religious cults and political movements have exhibited herd behavior, often involving a cult of personality. The behavior may be deliberately coordinated to some degree, but each individual follows the group in ways that clearly place health or life in peril -- religious cults of this type include the Peoples Temple in Jonestown, Heaven's Gate, and the Branch Davidians during the Waco Siege. In political movements, the dictators Adolph Hitler and Joseph Stalin relied heavily on a cult of personality.
[edit] Everyday decision-making
Benign herding behaviors may be frequent in everyday decisions, such as a person on the street deciding which of two restaurants to dine in. Suppose that both look appealing, but both are empty because it is early evening; so at random, this person chooses restaurant A. Soon a couple walks down the same street in search of a place to eat. They see that restaurant A has customers while B is empty, and choose A on the assumption that having customers makes it the better choice. And so on with other passersby into the evening, with restaurant A doing more business that night than B.[5]
The yen rose across the board Tuesday, reversing early losses after news that China's raising its stamp tax on stock trading triggered some unwinding of carry trades. The Xinhua News Agency reported that China will triple its stamp tax on equity trading to 0.3% to 0.1%, effective Wednesday. "With the Shanghai index hitting another record high last night, the latest move by the government is seen as a bid to clamp down on the overheated market," said Kathy Lien, chief strategist at DailyFX.com. "The hope is that the stamp tax will reduce the amount of trading, but with a tax of 3 in a thousand, the increase may only have a limited impact on the Chinese market in the long term." The euro was last down 0.1% at 163.49 yen, after earlier touching a record high at 164.29 yen. The dollar was down 0.1% at 121.52 yen
Not a big deal at all
EMT says that
EMT says that
tax measure... hang seng divergence was tip off... someone knew a few days ago.. and started shorting hang seng futures as indicated.
a lot of corruption. Its the same everywhere.
a lot of corruption. Its the same everywhere.
I am REALLY surprised...Oops...
China's stocks tumbled the most in three months after the government tripled the tax on securities transactions to cool a rally that's drawing more than 300,000 new investors a day.
The CSI 300 Index fell 288.54, or 6.9 percent, to 3879.75 as of 1:13 p.m. in Shanghai. About 50 of the benchmark's 300 members plunged by the 10 percent daily limit.
China's stocks tumbled the most in three months after the government tripled the tax on securities transactions to cool a rally that's drawing more than 300,000 new investors a day.
The CSI 300 Index fell 288.54, or 6.9 percent, to 3879.75 as of 1:13 p.m. in Shanghai. About 50 of the benchmark's 300 members plunged by the 10 percent daily limit.
I love 100% up room to go with zero risk $$$