November 28, 2004

The Great American Alpaca Mania of the Early 21st Century

Speaking of camelid husbandry, there's a fascinating story in the New York Times today about alpaca ranching. Given that the main value of the animals comes, precisely, from people who want to get into alpaca ranching, it's a classic bubble, what Robert Shiller calls a "naturally occurring Ponzi process", just like the original tulip mania. (Several "alpaca people" are quoted giving reasons why it is not a bubble; all are transparently false or irrelevant, and indeed typical of things people say during bubbles.) Irrational exuberance takes many forms; this has to be one of the most charming, if only for the names of the alpacas. I hope nothing too awful happens to them (or their owners) when this bubble bursts. (Via Kris.)

The Dismal Science

Posted at November 28, 2004 14:05 | permanent link

Three-Toed Sloth