01-28-2002, 08:45 PM
I have noticed an interesting slant on the "online poker" phenomenom when comparing it with the several financial "bubbles" (ie the South Sea Bubble-England 1600's,Tulipmania-Holland somewhat later,The Mississippi Bubble-France 1700's,US stock market-1920's,The Junk Bond market of the 1980's,the Dot.com/Nasdaq rise & fall,and perhaps even the Enron debacle could be considered as such) Bubbles can be descibed as having THREE PHASES.
Phase one, characterized by explosive growth coupled with a high return for the early entrants to the market as subsequent investors flocked in like so many seagulls to get their share of the feast.As time went on individuals would borrow indisriminately in order to participate.Eventually the influx of new investors would prove insufficient to maintain the initial rates of return on investment touted by the market makers.That point marks the end of the expansion phase and the beginning of the second phase.
The can be called the Equilibrium Phase.At this point the market is saturated and everyone invested in it is beginning to get a little jittery because the "bubble " has stopped expanding.At this time all that is sustaining the "Bubble" is merely the tail end of whatever sense of confidence and reassurance they as a group can muster up.The main characteristic here is a clear state of "DENIAL" as to what the true state of affairs are.As long as the market participants can sustain that state of "denial" then the market will hold together.
Sooner or later the weight of assumed debt exerts itself and causes the Third Phase, COLLAPSE !Something happens to cause a crisis of confidence and the entire market comes crashing down as individuals hurridly try to sell off what they can.With only sellers and no buyers,the entire market collapses quite rapidly.
The parallels to be drawn with respect to online poker could be:
1- the Expansion Phase....
This would seem kind of obvious.The whole industry is growing quite rapidly.The ranks of the players and operators are growing quite rapidly.People have come across with untold amounts of $$ to play online.I suspect that a significant % of it was borrowed money at that.Credit Card Cos have placed restrictions on their use at online gaming sites for a reason.At the same time the online pokerroom operators have devised alternatives such as Pay Pal and Fire Pay for a reason too.Facilitating CC use has to be numbered as one of those reasons.
2- the Equilibrium Phase.....
We may be witnessing the early stages of this.Already many have noticed the standard of play at lower limits increase.That is one sign that market saturation is being approached.Too, the stridency with which individuals ,who share their doubts as to the honesty of the games,are attacked suggests that the element of "denial" has gained a toehold in the "group-think" of the population.
3- Phase three, Collapse....
No sign of this at this point in time.Nothing unusual there though as it typically strikes like a bolt out of the blue.
No doubt my observations are merely conjecture.However,we all know that there is really "nothing new under the sun", don't we?We should , it's been shown to us often enough.It is with that thought in mind that I am posting these thoughts.One would think that after seeing "Bubbles burst" several times down through the ages that maybe we could learn to identify one before it blows up on us.
Anyway maybe the shoe fits or then again maybe it's like trying get a debutante to wear caulk boots to her debut!
Phase one, characterized by explosive growth coupled with a high return for the early entrants to the market as subsequent investors flocked in like so many seagulls to get their share of the feast.As time went on individuals would borrow indisriminately in order to participate.Eventually the influx of new investors would prove insufficient to maintain the initial rates of return on investment touted by the market makers.That point marks the end of the expansion phase and the beginning of the second phase.
The can be called the Equilibrium Phase.At this point the market is saturated and everyone invested in it is beginning to get a little jittery because the "bubble " has stopped expanding.At this time all that is sustaining the "Bubble" is merely the tail end of whatever sense of confidence and reassurance they as a group can muster up.The main characteristic here is a clear state of "DENIAL" as to what the true state of affairs are.As long as the market participants can sustain that state of "denial" then the market will hold together.
Sooner or later the weight of assumed debt exerts itself and causes the Third Phase, COLLAPSE !Something happens to cause a crisis of confidence and the entire market comes crashing down as individuals hurridly try to sell off what they can.With only sellers and no buyers,the entire market collapses quite rapidly.
The parallels to be drawn with respect to online poker could be:
1- the Expansion Phase....
This would seem kind of obvious.The whole industry is growing quite rapidly.The ranks of the players and operators are growing quite rapidly.People have come across with untold amounts of $$ to play online.I suspect that a significant % of it was borrowed money at that.Credit Card Cos have placed restrictions on their use at online gaming sites for a reason.At the same time the online pokerroom operators have devised alternatives such as Pay Pal and Fire Pay for a reason too.Facilitating CC use has to be numbered as one of those reasons.
2- the Equilibrium Phase.....
We may be witnessing the early stages of this.Already many have noticed the standard of play at lower limits increase.That is one sign that market saturation is being approached.Too, the stridency with which individuals ,who share their doubts as to the honesty of the games,are attacked suggests that the element of "denial" has gained a toehold in the "group-think" of the population.
3- Phase three, Collapse....
No sign of this at this point in time.Nothing unusual there though as it typically strikes like a bolt out of the blue.
No doubt my observations are merely conjecture.However,we all know that there is really "nothing new under the sun", don't we?We should , it's been shown to us often enough.It is with that thought in mind that I am posting these thoughts.One would think that after seeing "Bubbles burst" several times down through the ages that maybe we could learn to identify one before it blows up on us.
Anyway maybe the shoe fits or then again maybe it's like trying get a debutante to wear caulk boots to her debut!