How a Financial Crisis Started

Nan Xiao 2018-08-29 1 minute read
Photo by Ablimit Ablet on Unsplash

Photo by Ablimit Ablet on Unsplash

I once read a joke with some dry humor a long time ago. It’s almost a parable about how the system amplifies fragility. I’m not entirely sure where it originated, but here you go:

A bunny bounced into a bakery and asked the baker: “do you have 100 croissants?”

The baker: “Ahh, I’m so sorry we don’t have that many.”

The bunny: “Oh… okay.” The bunny left disappointed.

On the second day, the bunny bounced into the bakery: “do you have 100 croissants?”

The baker: “I’m sorry we still don’t have that…”

The bunny left disappointed again.

On the third day, the bunny bounced into the bakery: do you have 100 croissants?

The baker: “Yes! Yes! We’ve got 100 croissants today!”

The bunny: “That’s perfect! I’ll take two.”

Bill Gates may think that the supply and demand model doesn’t apply to software. I neither agree or disagree. Historically, the burst of the dot-com bubble left us some infrastructure of the high-speed Internet. The subprime mortgage crisis left some cheap houses. I cannot say for sure what will be left when a crisis happens to the “blockchain” or “AI” industries. Although there could be a lot of Mac computers, Dell monitors, and Python code.