

LinkedIn share price raises bubble fears - Peroni
http://www.bbc.co.uk/news/technology-13436866

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powerslave12r
I hear all these talks about Linked helps people connect and make contacts and
keep in touch and yada yada, can anyone on HN actually share some personal
experiences in which Linked In may have helped them at all?

Cause personally, I think it's no use to me, but I am willing to take
advantage of something I might be overlooking.

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chollida1
I use it all the time to look at a candidates resume.

It's easy to put anything you want on a paper resume that you hand me.

It's much harder to put a bunch of lies on your resume when all your peers can
see it.

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orijing
Interestingly I wrote an answer on Quora that describes a game-theoretic
analogy to asset price bubbles: [http://www.quora.com/Is-there-a-(game-
theory)-game-which-cap...](http://www.quora.com/Is-there-a-\(game-
theory\)-game-which-captures-the-core-dilemma-of-an-economic-
bubble/answer/Jinghao-Yan)

While I'm not sure if LinkedIn's price is a sign of a bubble, even if it were
a bubble price appreciation can be sustained by the forces described in the
answer above. The only question is for how long.

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ignifero
Can you actually stop a bubble from forming or busting? Are there any
documented examples?

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danmelnick
My understanding is that bubbles form when money is cheap and is chasing
returns. If interest rates went up and/or the money supply was dampened and
people had incentive to not chase returns in markets like tech, a bubble would
be less likely to form.

That said, the psychology of bubbles is difficult to stop once it gains
momentum.

The problem is that an entity like the fed doesn't have better information
than the markets about appropriate asset pricing, so attempts to dampen
bubbles might turn out to be premature or ill advised.

That's my $.02, I'm not a trained economist, just an armchair observer.

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dataminer
Regarding the cheap money, isn't it better for markets to decide the interest
rate rather than the Fed? Are there any examples in history where a country
left the interest rate to be set by the market.

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orijing
It's still the market that decides the interest rate. The Fed simply adjusts
the money supply by buying or selling short term securities (historically) in
order to create or soak up liquidity. The interest rate that results from
these "Open Market transactions" are what you hear. The focus on short term
securities means that in the long run the supply of money is still private-
market driven.

There's an increased focus on affecting the medium-term or longer-term
interest rates through the purchase of toxic assets like mortgage backed
securities.

Not sure if that answers or clarifies anything though. I can say more if
you're interested.

