ABSTRACT
Everyone and their uncle has an intuitive sense of what a bubble is. In folk wisdom, a bubble is a meteoric rise in prices of an asset followed by a calamitous crash. Everyone and their uncle blame the bubble on speculators who look to flip assets – selling to a “greater fool,” and pocketing a profit before prices crash to earth. After a crash, everyone and their uncle claim to have known all along that the boom times were a bubble bound to burst. (That is not to say that everyone and their uncle did not try to ride the boom themselves.) Once a boom and bust cycle has ended, everyone and their uncle see fresh bubbles forming everywhere. Indeed, the wake of the Panic of 2008 has been no different; as the Introduction to this book noted, journalists now spot bubbles everywhere.
