• Incest and the Stock Exchange
    • “As the Railway Mania, the first of the infamous Victorian financial bubbles, consumed the attention of the British populace and sent the workings of the Stock Exchange into a speculative frenzy, for the next two months the attention of the managers would be elsewhere, namely, on an investigation into whether or not one of the Stock Exchange’s waiters had an incestuous relationship with his daughter.”
  • Collective Hallucinations and Inefficient Markets
    • “The British Railway Mania of the 1840s was by many measures the greatest technology mania in history, and its collapse was one of the greatest financial crashes. It has attracted surprisingly little scholarly interest. In particular, it has not been noted that it provides a convincing demonstration of market inefficiency.”
  • An Ancient Relationship: FinTech and Financial Advice
    • “Few modern professions have lasted as long as the financial adviser, which archaeological evidence in Mesopotamia dates to at least the third millennium BCE. How has this profession lasted so long? The industry’s longevity is largely attributable to financial technology (FinTech), which has historically empowered advisers to better serve their clients.”
  • The Mississippi Bubble
    • When the Scottish financier John Law claimed to be able to transmute paper into money, France’s Regent allowed him to conduct an experiment on the French economy. Law ’s unalloyed successes quickly enlivened the mercurial temperaments of Parisian speculators, but when the bubbling stock overflowed in January 1720, liquidations rapidly occurred and the economy sank into inertia.”
  • Sovereign Bonds Since Waterloo
    • “This paper studies external sovereign bonds as an asset class. We compile a new database of 220,000 monthly prices of foreign-currency government bonds traded in London and New York between 1815 (the Battle of Waterloo) and 2016, covering 91 countries. Our main insight is that, as in equity markets, the returns on external sovereign bonds have been sufficiently high to compensate for risk. Real ex-post returns averaged 7% annually across two centuries, including default episodes, major wars, and global crises.”

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