Laughter: The New Financial Instability Index

Phil Izzo of the Wall Street Journal points us to the invaluable work of the people at The Daily Stag Hunt, who tallied the number of times that laughter appears in the transcripts of the Fed’s FOMC meetings.  Peak laughter, as The Daily Stag points out, corresponds nicely with the height of the housing bubble:

If there weren’t a six-year delay on the release of these transcripts, this could be a useful tool for measuring systemic risk.