Time to turn focus on the fake “Prometheus”

    Everything has its price, from a physical good to an intangible financial product. Price itself is not rational or reasonable at all. Rather, price to a certain product is in fact built up based on perception and expectation. When people perceive something as valuable, and expect such “value” could sustains as long as possible, and then this perception will start to be contagious until the reality comes in a totally opposite direction. Bubble is often used to describe such kind of burst of illusion. When a bubble goes burst, then that means those who behaved heavily relied on the perception that this bubble would never stop enlarging itself, will suffer incredible pains and inner explosion. Just like what we observed from the 2008 Global financial crisis, a burst of house price bubble dampened the price of those residential mortgage based securities and further triggered the chain reaction that melt down the whole financial system.

  

    While pursuing something with high value or price is essentially kind of human nature. No matter the reason people pursue certain product is on the purpose of speculation or motivated by the concept of reserving fortune for the rainy day, no one would blame this justifiable behavior unless the disastrous consequence is foreseeable and inevitable. And what make such “bubble creation – burst cycle” even worse and vicious is that sometimes the price of certain thing is actually “interpreted” rather than perceived. Those who are capable of interpreting certain value of certain things, and those who can access the channel or platform and further use those channels to widespread their interpretations are in fact those we, as the ordinary people, should be cautious of. Few people will ponder the question such as: who define the trend and style? Who define what brand is worthy of thousands of dollars, and what is not? Who decide what target is worth the immense investments, and who interpret what product is undervalued and what is overvalued.    

    Perception comes after interpretation. Those who are able to propose the “first draft” version of the perception are those who in fact decide what should be contained in this perception bubble. Our current financial regulatory regime put most of its energies and resources into the filed where the regulators fight with the disastrous effects and consequences that brought by the huge, misleading, illusionary perception, instead of where the regulators extinguish the yet full-fledged flame of perception. Those investment pundits and so called trend observers as well as the economists whose words always sounds like prophecy are those our regulators should really care about.

They are not Prometheus who steals the fire from Zeus; instead, they are “thefts of sin fire”.