Ferguson argues that before crashes occur, systems appear stable and balanced, causing our brains to misjudge crash timing despite inevitability.
“Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits – as inevitably it will – everyone seems surprised. And our brains keep telling us it’s not time for a crash.”
Ferguson argues that financial systems amplify human emotional volatility, causing booms and busts.
“Si el sistema financiero tiene un defecto, es que nos refleja y nos magnifica tal como somos. El dinero amplifica nuestra tendencia a reaccionar de forma exagerada, a oscilar entre la euforia cuando las cosas van bien y la depresión profunda cuando van mal. Los auges y las crisis son, en el fondo, productos de nuestra volatilidad emocional”