Spiking the Punch Bowl: The Economic Hangover Theory

Overinvestment, overindulgence, and fiscal binging—call it what you will, but it always seems to lead to a head-pounding day of reckoning. The “hangover theory” is a business-cycle philosophy that famed economist Paul Krugman summarized back in 1998: “In the beginning, an investment boom gets out of hand. Maybe excessive money creation or reckless bank lending…

Spiking the Punch Bowl: The Economic Hangover TheoryDetails

An Economic Crossroad: Where Exuberance Meets Recklessness

Upbeat earnings, rosy job reports, rate-cut chatter, a red-hot labor market, and robust consumer spending—it certainly has been high times on Wall Street. One is reminded of the days of excess, the “greed is good,” white-collar culture of billion-dollar deals, spending benders, and banks behaving badly. The current appetite in stocks is nothing short of…

An Economic Crossroad: Where Exuberance Meets RecklessnessDetails