The Bubble Report: August Edition

World financial history has been characterized by a series of periodic manias. There have been more than two dozen key manic events during the past several centuries (and that only includes those formally recorded—there have been others and for much further back than that, based on anecdotal accounts). Often, bubbles begin with a rational concept, such as high-growth new technologies/industries, real estate in a new area, or some other new/unique asset that suddenly becomes popular (a key example being Holland’s tulip bulb mania of the 1600’s—when plants briefly turned into valuable financial property). Bubbles have also had a tendency to begin as an unintended byproduct of other conditions or policies, such as newfound levels of discretionary wealth or easy borrowing conditions. Read more