1. Economic bubble – An economic bubble or asset bubble is trade in an asset at a price or price range that strongly deviates from the corresponding asset's intrinsic value. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future. Asset bubbles are now widely regarded as a recurrent feature of economic history. Such a drop is known as a burst. Prices in an economic bubble can become impossible to predict from demand alone. Research has recently shown that bubbles may appear even without uncertainty, speculation, or rationality. Similar explanations suggest that bubbles might ultimately be caused by processes of price coordination. More recent theories of formation suggest that these events are sociologically driven. For instance, explanations have focused on the role that culturally-situated narratives play in these events. This was one of the earliest financial crises; other episodes were referred to as "manias", as in the Dutch mania. Political economist Robert E. Wright argues that bubbles can be identified before the fact with high confidence. Not only can the aftermath of a crash devastate the economy of a nation, but its effects can also reverberate beyond its borders. Another important aspect of economic bubbles is their impact on spending habits. Market participants with overvalued assets tend to spend more because they "feel" richer. This is usually done by increasing the interest rate.Economic bubble – A card from the South Sea Bubble
2. Tulip mania – At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. The term "mania" is now often used metaphorically to refer to any large economic bubble when asset prices deviate from intrinsic values. The 1637 event was popularized by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. According at one point 12 acres of land were offered for a Semper Augustus bulb. Dutch commerce suffered a severe shock. Although Mackay's book is a classic, his account is contested. Research is difficult because of the limited economic data from the 1630s—much of which come from biased and very speculative sources. Some modern economists have proposed rational explanations, rather than a speculative mania, for the fall in prices. For example, other flowers, such as the hyacinth, also had initial prices at the time of their introduction, which immediately fell. Tulip bulbs were soon distributed to Augsburg, Antwerp and Amsterdam. The tulip was different from every other flower known to Europe with a saturated intense petal color that no other plant had. The appearance of the nonpareil tulip as a symbol at this time coincides with the rise of newly independent Holland's trade fortunes. No longer the Spanish Netherlands, its economic resources could now be channeled into the country embarked on its Golden Age. Amsterdam merchants were at the center of the lucrative East Indies trade, where one voyage could yield profits of 400%. As a result, a profusion of varieties followed.Tulip mania – A tulip, known as "the Viceroy" (viseroij), displayed in the 1637 Dutch catalog 'Verzameling van een Meenigte Tulipaanen'. Its bulb cost between 3,000 and 4,200 guilders (florins) depending on size (aase). A skilled craftsman at the time earned about 300 guilders a year.
3. South Sea Company – The South Sea Company was a British joint-stock company founded in 1711, created as a public-private partnership to consolidate and reduce the cost of national debt. The company was also granted a monopoly to trade with South America, hence its name. At the time it was created, Britain was involved in the War of the Spanish Succession and Spain controlled South America. There was no realistic prospect that trade would take place and the company never realised any significant profit from its monopoly. The Bubble Act 1720, which forbade the creation of joint-stock companies without royal charter, was promoted by the South Sea company itself before its collapse. In Great Britain, a considerable number of people were ruined by the share collapse, the national economy greatly reduced as a result. Huge bribes were given to politicians to support the Acts of Parliament necessary for the scheme. The only significant trade that did take place was in slaves, but the company failed to manage this profitably. A parliamentary enquiry was held after the crash to discover its causes. A number of politicians were disgraced, people found to have profited unlawfully from the company had assets confiscated proportionate to their gains. The company was continued to operate after the Bubble. The headquarters were in Threadneedle Street at the centre of the financial district in London; today the Bank of England has headquarters on Threadneedle Street. In August 1710 Robert Harley was appointed Chancellor of the Exchequer in a government of commission. The government at this time had become reliant on the Bank of England. The government had become dissatisfied with the service it was receiving and Harley was actively seeking new ways to improve the national finances.South Sea Company – Hogarthian image of the 1720 "South Sea Bubble" from the mid-19th century, by Edward Matthew Ward, Tate Gallery
4. Mississippi Company – The Mississippi Company of 1684 became the Company of the West in 1717, expanded as the Company of the Indies from 1719. In May 1716, the Banque Générale Privée, which developed the use of money, was set up by John Law. Three quarters of the capital consisted of government bills and government-accepted notes. In August 1717, he bought the Mississippi Company to help the French colony in Louisiana. In the same year Law conceived a joint-stock company called the Compagnie d'Occident. The bank became the Banque Royale in 1718, meaning the notes were guaranteed by Louis XV of France. Wars had nearly bankrupted the French monarchy. Rather than reduce spending, the Regency of Louis XV of France endorsed the monetary theories of Scottish financier John Law. In 1716, Law was given a charter for the Banque Royale under which the national debt was assigned to the bank in return for extraordinary privileges. The key to the Banque Royale agreement was that the national debt would be paid from revenues derived from opening the Mississippi Valley. The Bank was tied to the Companies of the Indies. All were known as the Mississippi Company. The Mississippi Company had a monopoly on trade and wealth. The Company boomed on paper. Law was given Duc d'Arkansas.Mississippi Company – View of the camp of John Law at Biloxi, December 1720
5. Railway Mania – Railway Mania was an instance of speculative frenzy in Britain in the 1840s. It followed a common pattern: as the price of railway shares increased, more money was poured in by speculators until the inevitable collapse. The Liverpool and Manchester, opened in 1830 and proved to be highly successful for transporting both passengers and freight. Early 1840s saw the British economy slow down. By the mid-1840s, the manufacturing industries were once again growing. Crucially, there were more investors in British business. The Industrial Revolution was creating a new, increasingly affluent middle class. With these limits removed anyone could invest money on railways were heavily promoted as a foolproof venture. Shares could be purchased for a 10 % deposit with the company holding the right to call in the remainder at any time. The British government promoted an totally ` laissez-faire' system of non-regulation in the railways. Anyone could form a company, submit a Bill to Parliament. Magnates like George Hudson developed routes by amalgamating small railway companies and rationalising routes. He ultimately failed owing to his fraudulent practices of, for example, paying dividends from capital. As with other bubbles, the Railway Mania became a self-promoting cycle based purely on over-optimistic speculation. Coupled to this, in late 1845 the Bank of England put up interest rates.Railway Mania – A painting of the inaugural journey of the Liverpool and Manchester Railway, by A.B. Clayton
6. Encilhamento – This policy of economic incentives created unbridled speculation, encouraged fraudulent initial public offerings and takeovers. Proposed changes in legislation for example, was one of the reasons why large landowners and former slaveholders supported the establishment of the republic. In this political environment, social under the pretext of promoting the process of industrialization of the country, occurred the Encilhamento. Big Rentiers: holders of the native "big money", who go after the best rate of return for their capital. From that time, highlight the British banks led by Rothschilds. Along with the increase in liquidity, there was the introduction of modern financial mechanisms, enhancing the financial leverage possibilities. The reduction in the issuance of government bonds has also opened space for the expansion of issues. Ironically, when took office, soon after the proclamation of the Republic, he put into practice all what he had criticized before. The investor who wouldn't answer to the new offerings, lost the rights to all the money paid previously. However, due to the extraordinary powers conferred to monetary authorities, the private interests in Encilhamento just overlapping the public interest. Among these, was Rui Barbosa, who had to go into exile in Europe.Encilhamento – Public finance
7. Roaring Twenties – The Roaring Twenties is a term for Western society and culture in the 1920s. In France and Quebec, it was known as the "années folles", emphasizing the era's social, cultural dynamism. Jazz music blossomed, the flapper redefined modern womanhood, in the wake of hyper-emotional patriotism after World War I, normalcy returned to politics. In most major countries, women won the right to vote. The social and cultural features known as the Roaring Twenties began in leading metropolitan centers, then spread widely in the aftermath of World War I. The United States gained dominance in finance. By the middle of the decade, prosperity was widespread, with the second half of the decade known, especially in Germany, as the "Golden Twenties". The spirit of the Roaring Twenties was marked by a general feeling of novelty associated with traditions. Everything seemed to be feasible through modern technology. Especially automobiles, moving pictures, radio, proliferated "modernity" to a large part of the population. Decorative frills were shed in favor of practicality in both daily life and architecture. At the same time, dancing rose in popularity, in opposition to the mood of World War I. As such, the period is also often referred to as the Age. The Wall Street Crash of 1929 ended the era, as the Great Depression brought years of worldwide hardship. However, some sectors were stagnant, especially mining.Roaring Twenties – Climax of the new architectural style: the Chrysler Building in New York City was built after the European wave of Art Deco reached the United States.
8. 1997 Asian financial crisis – At the time, Thailand had acquired a burden of foreign debt that made the country effectively bankrupt even before the collapse of its currency. Indonesia, South Korea and Thailand were the countries most affected by the crisis. The Philippines were also hurt by the slump. Brunei, China, Singapore, Taiwan and Vietnam were less affected, although all suffered from a loss of demand and confidence throughout the region. In South Korea, the ratios rose from 13% to 21% and then as high as 40%, while the other northern newly industrialized countries fared much better. Only in Thailand and South Korea did debt service-to-exports ratios rise. The efforts to stem a global economic crisis did little to stabilize the domestic situation in Indonesia, however. The effects of the crisis lingered through 1998. In 1998 the Philippines growth dropped to virtually zero. By 1999, however, analysts saw signs that the economies of Asia were beginning to recover. After the 1997 Asian Financial Crisis, economies in the region are working toward financial stability on financial supervision. Until 1999, Asia attracted almost half of the total capital inflow into developing countries. The economies of Southeast Asia in particular maintained high interest rates attractive to foreign investors looking for a high rate of return. As a result, the region's economies received a large inflow of money and experienced a dramatic run-up in asset prices. This achievement was widely acclaimed by financial institutions including IMF and World Bank, was known as part of the "Asian economic miracle".1997 Asian financial crisis – Fall of Suharto: President Suharto resigns, 21 May 1998.
9. Dot-com bubble – The period was marked by the founding of several new Internet-based companies commonly referred to as dot-coms. The collapse of the bubble took place during 1999–2001. Some companies, such as pets.com and Webvan, failed completely. Others – such as Cisco, whose stock declined by 86% – lost a large portion of their market capitalization but remained stable and profitable. Some, such as eBay.com, later recovered and even surpassed their dot-com-bubble peaks. The stock of Amazon.com came to exceed $700 per share, for example, after having gone from $107 to $7 in the crash. The low interest rates of 1998–99 helped increase the start-up capital amounts. A canonical "dot-com" company's model relied on harnessing network effects by building share. The motto “get big fast” reflected this strategy. This occurred in industrialized nations due to the reducing “digital divide” in the late 1990s, early 2000s. The absence of infrastructure and a lack of understanding were two major obstacles that previously obstructed mass connectivity. For these reasons, individuals had limited capabilities in what they could do and what they could achieve in accessing technology. Increased means of connectivity to the Internet than previously available allowed the use of ICT to progress from a luxury good to a necessity good. As connectivity grew, so did the potential for venture capitalists to take advantage of the growing field. The impacts of technologies driven from the effectiveness of new Internet websites ultimately influenced the growth during this time.Dot-com bubble – The NASDAQ Composite index spiked in the late 90s and then fell sharply as a result of the dot-com bubble.
10. Uranium bubble of 2007 – This coincided with significant rises of price of uranium mining and exploration companies. After mid-2007, at end 2010 was relatively stable at around $100/kg. The upward trend for the prices of uranium was already apparent since 2003. This prompted increases in activity. This created uncertainty about short-term future of the supply. Other factors are a reduction in available weapons-grade uranium. Due to increased prospecting, inferred reserves of uranium have increased by 15 % between 2005 and 2007. 2000s commodities boom Uranium Participation CorporationUranium bubble of 2007 – Monthly uranium spot price in USD per pound from 1980 to 2011. The 2007 price peak is clearly visible.
11. Real estate bubble – The financial crisis of 2007–08 was related to the bursting of real estate bubbles which had begun during the 2000s around the world. Bubbles in housing markets are more critical than stock market bubbles. Historically, price busts occur on average every 13 years, lasts for result in about 4 percent loss in GDP. Housing price busts lead to output losses that are twice as large. A recent laboratory experimental study also shows that, compared to financial markets, real estate markets involve longer boom and bust periods. As with all types of economic bubbles, disagreement exists over whether or not a real bubble can be predicted, then perhaps prevented. Speculative bubbles are persistent, systematic and increasing deviations of actual prices from their fundamental values. Bubbles can often be hard to identify, even after the fact, due to difficulty in accurately estimating intrinsic values. In real estate, fundamentals can be estimated from rental yields or based on a regression of actual prices on a set of demand and/or supply variables. Some argue further that central banks should take action to prevent bubbles from forming, or to deflate existing bubbles. Within mainstream economics, economic bubbles, in particular real estate bubbles, are not considered major concerns. The economic perspective is that economic bubbles result in a redistribution of wealth. When they decline, there is a negative effect. These effects can be smoothed by fiscal policies. The ultimate effect on owners who bought before the bubble formed and did not sell is zero.Real estate bubble – US house price trend (1998–2008) as measured by the Case-Shiller index
12. Australian property bubble – The Australian property bubble is the ongoing debate in Australia as to whether the Australian property market is significantly overpriced, due for a significant downturn. The debate has been ongoing since at least 2001, with Australian property prices continuing to rise. Some commentators, including one Treasury official, claim the Australian market is in a significant bubble. The rising cost of living, negative gearing, volatile share market encourage investments in property. However due legislative changes that allow an excess of developments, there is currently an oversupply of housing. Various industry professionals have suggested that house prices have the potential to keep rising in line with income growth. Some commentators have blamed rising property prices on land supply, driving up the cost of land, lots, thus homes. This argument is not widely accepted. Since 2012 prices have again risen strongly relative to incomes and rents. In June 2016, the Organisation for Economic Co-operation and Development reported that Australia's boom could end in ` dramatic and destabilising' real estate hard landing. The Australian market has seen steady increases of around 3 % per annum since the 1970s. Since the 1990s, however, prices have risen by around 6% per annum. Since then, comparable countries have experienced property crashes. All capital cities, with the exception of Sydney, have seen strong increases in property prices since about 1998-9. Sydney house prices increased from $573,000 to $671,500 between 2010 while other capitals have roughly doubled in price since 2003.Australian property bubble – Chart 1: House Price Index and CPI. Source ABS
13. Indian property bubble – The Indian property bubble refers to the concern expressed by some Indian economists that housing market in some major Indian cities may be in a bubble. The real sector is thought to be collapsing due to increasing costs of financing. Real estate projects in India take a long time to complete due to a corrupt regulatory mechanism. Several of the India's publicly traded real estate firms are in debt. It is expected the market will undergo price corrections. According to Liases Foras, 30 % of the transaction in the real estate sector is done with black money. Demonetisation of 1000 rupee notes by Prime minister Modi proved to be the last straw that broke the black money camel's back. Experts expect new property prices to fall upto 50 % in Tier 1 cities. He also said the prices should be falling due to the lack of transparency in the sector, it is not doing so. In March 2005, the Government of India permitted 100 % direct investment in construction and development projects. Before that persons of Indian origin were allowed to investment in the real estate sector. Foreign investors could only invest through partnerships with Indian firms. However, foreign investors were not allowed to hold land for speculative purposes. In July 2013, the Reserve Bank of India increased the bank rate to 10.25 %. This increased the cost of funds for the entire sector.Indian property bubble – A major office complex in Gurgaon
14. Irish property bubble – The fall in commercial property prices contributed to the Irish banking crisis. House prices in Dublin were down 56 % from peak and apartment prices down over 62 %. For a time, house prices returned to 20th century levels and mortgage approvals dropped to 1971 levels. As of December 2012, commercial and buy-to-let arrears are at 18 %. Since early 2013 property prices in the country have begun to recover with property prices in Dublin up over 20% from their nadir. From 1991 to 2001, there was a large expansion in the workforce. From 1990 to 2000, the Irish national product per capita rose 58 %, bringing it above the European Union average. These factors led to house prices increasing to May 2001 alone. House prices went on to more than double with tax incentives being a key driver of this price rise. The Fianna Fáil-Progressive Democrat government received much criticism for these policies. Interest rates set by the European Central Bank are only guided by low inflation targets in the Eurozone. The pace of expansion to finance the Irish housing bubble accelerated sharply in the years preceding the crisis. The relaxed and weak regulatory supervision of the financial sector made the financing of excessively increasing real estate prices in the Irish market possible. The Central Bank were responsible for the inadequacy of the financial stability system at the time of crisis. The Central Bank admitted in November 2005, that estimates of overvaluation of 20 % to 60 % in the residential property market existed.Irish property bubble – An advertisement for 100% mortgages seen outside Dublin (17 July 2007).
16. Spanish property bubble – The Spanish property bubble is the collapsed overshooting part of a long-term price increase of Spanish real estate prices. This long-term increase has happened in various stages from 1985 up to 2008. Coinciding with the financial crisis of 2007–08, prices began to fall. House ownership in Spain is above 80%. The desire to own one's own home has thus become part of the Spanish psyche. In addition, regulation encourages ownership: 15 % of mortgage payments are deductible from personal income taxes. Further, eviction is slow, thereby discouraging renting. Banks offered 40-year and, more recently, 50-year mortgages. When the speculative bubble popped, Spain became one of the worst affected countries. According over the June 2007-June 2008 period, Spain has been the European country with the sharpest plunge in construction rates. Prices were initially relatively stable with sellers reluctant to offer large discounts. The average price as of late 2008 was 2,095 euros/m2 Actual sales over the July 2007-June 2008 period were down an average 25.3 %. Some regions have been more affected than others. Unlike much of the United States, Spain does not recognize mortgage loans as nonrecourse debt. In the period of 1997—2006, the price of housing in Spain had risen about 150% in nominal terms, equivalent to 100% growth in real terms.Spanish property bubble – The housing bubble was fed by the credit to private sector (individuals and developers), which led to a significant increase in private debt (blue) stopped with the international financial crisis, ending the speculative process.
17. United States housing bubble – The United States housing bubble was a real estate bubble affecting over half of U.S. states. Housing prices peaked in early 2006, reached new lows in 2012. On December 2008, the Case-Shiller home price index reported its largest price drop in its history. In October 2007, the U.S. Secretary of the Treasury called the bursting bubble "the most significant risk to our economy." Land prices contributed much more to the price increases than did structures. This can be seen in the building index in Fig. 1. An estimate of value for a house can be derived by subtracting the replacement value of the structure, adjusted for depreciation, from the home price. Housing bubbles may occur in global real estate markets. The underlying causes of the bubble are complex. Factors include tax policy, historically low interest rates, tax lending standards, speculative fever. This bubble may be related to the stock market or bubble of the 1990s. This bubble roughly coincides with the real estate bubbles of Hong Kong, Spain, Poland, Hungary and South Korea. In 2001, Alan Greenspan dropped interest rates to a low 1% in order to jump the economy after the ".com" bubble. Other Wall Street firms started borrowing money due to its inexpensiveness. Greenspan warned of "double digit declines" in home values "larger than most people expect."United States housing bubble – Bank run on the U.K.'s Northern Rock Bank by customers queuing to withdraw savings in a panic related to the U.S. subprime crisis.
18. Causes of the United States housing bubble – In July 1978, Section 121 older at the time of sale. In 1981, the Section 121 exclusion was increased from $100,000 to $125,000. The Tax Reform Act of 1986 eliminated the deduction for interest paid on credit cards. As interest remained deductible, this encouraged the use of home equity through refinancing, second mortgages, home equity lines of credit by consumers. This made the only investment which escaped capital gains. Historically, the financial sector was heavily regulated by the Glass–Steagall Act which separated commercial and investment banks. It also set strict limits on Banks' interest loans. Starting in the 1980s, considerable deregulation took place in banking. Banks were deregulated through: The Depository Institutions Deregulation and Monetary Control Act of 1980. The Garn–St. Germain Depository Institutions Act of 1982. The Gramm–Leach–Bliley Act of 1999. This deregulation allowed risky products to exist which contributed to the housing bubble and easy credit. Several authors single out the banking deregulation by the Gramm–Leach–Bliley Act as significant. Nobel Prize-winning economist Paul Krugman has called Senator Phil Gramm "the father of the financial crisis" due to his sponsorship of the act.Causes of the United States housing bubble – Inflation-adjusted housing prices in Japan (1980–2005) compared to home price appreciation the United States, Britain, and Australia (1995–2005).
19. Carbon bubble – A carbon bubble is the idea that there is a bubble in valuation of companies dependent on fossil-fuel-based energy production. This is because true costs of dioxide in intensifying global warming are not taken into account in a company's stock market valuation. Currently the price of fossil companies' shares is calculated under the assumption that all fossil fuel reserves will be consumed. A more recent analysis made by Citi puts that figure at $ trillion. According to the UK's Committee on Climate Change, overvaluing companies that produce fossil fuels and greenhouse gases poses a serious threat to the economy. The committee warned Bank of England of the risks of the carbon bubble in 2014. The Stern report in 2006 stated that the benefits of early action to decrease the use of oil, coal and gas considerably outweigh the costs. The term "Carbon bubble" arose from the increasing awareness of the impact of fossil fuel combustion on global temperatures. The term appeared by Bill McKibben, published in Rolling Stone magazine in July 2012. It was further popularized by the Carbon Tracker Initiative, which published key reports in April 2013. These were followed later in 2013 by a report from the Demos tank. A planned and orderly transition away from dependence on fossil fuels could prevent a disruptive "bursting of the bubble". A number of developments are supporting such a transition. Hence continued development of reserves would be extraneous to needs. The impact on producers would vary widely depending on the cost of production in their areas of operation.Carbon bubble – Carbon Bubble according to data by the Carbon Tracker Initiative 2013.
20. Higher education bubble – The higher education bubble in the United States is a claim that excessive investment in higher education could have negative repercussions in the broader economy. Also, employers have responded by raising the academic requirements of many occupations higher than is really necessary to perform the work. Education contributes to economic growth. Even among those who are employed in jobs that do not ostensibly require their level of education, education increases earnings and productivity. Labor economists, other social scientists generally struggle to explain apparent under-investment in higher education, given the large financial returns. Moreover, student loans are profitable for the government. Benjamin Ginsberg explains the connection between the increased ability to pay The Fall of the Faculty. As discussed below, bubble" is controversial and has been rejected by some economists. Indeed, many Americans still believe in the value of a education, although they are unsure about its quality and affordability. The data also suggests that, notwithstanding a slight increase in 2008 -- 09, student default rates have declined since the mid-1980s and 1990s. Those with college degrees are much less likely than those without to be unemployed, even though they are more expensive to employ. This "Bennett hypothesis" claims that readily available loans allow schools to increase tuition prices without regard to demand elasticity. Higher tuition prices are correlated with increased public perceptions of prestige. Over the past thirty years, demand has increased as institutions provided more resources to students. Additionally, schools tend to enroll fewer students as they improve student offerings and increase prices.Higher education bubble – Study comparing college revenue per student by tuition and state funding in 2008 dollars.
21. AI winter – In the history of artificial intelligence, an AI winter is a period of reduced funding and interest in artificial intelligence research. The term was coined to the idea of a nuclear winter. The field has experienced several hype cycles, followed by disappointment and criticism, followed by funding cuts, decades later. The term first appeared in 1984 at the annual meeting of AAAI. Three years later, the billion-dollar AI industry began to collapse. Hypes are common in many emerging technologies, such as the dot-com bubble. The AI winter is primarily a collapse in the perception of AI by government bureaucrats and venture capitalists. Despite the fall of AI's reputation, it has continued to develop new and successful technologies. Yet today many thousands of AI applications are deeply embedded in the infrastructure of every industry." As Ray Kurzweil writes: "the AI winter is long since over." During the Cold War, the US government was particularly interested in the instant translation of Russian documents and scientific reports. The government aggressively supported efforts starting in 1954. At the outset, the researchers were optimistic. There were "many predictions of imminent ` breakthroughs"'. However, researchers had underestimated the profound difficulty of word-sense disambiguation.AI winter – A perceptron
22. Stock market bubble – Behavioral theory attributes market bubbles to cognitive biases that lead to groupthink and herd behavior. Bubbles occur not only in real-world markets, with their inherent uncertainty and noise, but also in highly predictable experimental markets. Theoretical explanations of market bubbles have suggested that they are rational, intrinsic, contagious. Two early stock market bubbles were the South Sea bubble in England. Both bubbles came to an abrupt end in 1720, bankrupting thousands of unfortunate investors. Many others, are recounted in "Extraordinary Popular Delusions and the Madness of Crowds". The 1920s saw the widespread introduction of an amazing range of technological innovations including radio, the deployment of electrical power grids. The 1990s was the decade when Internet and e-commerce technologies emerged. These hot IPO markets misallocate investment funds to areas dictated by speculative trends, rather than to enterprises generating longstanding economic value. Sometimes, people will dismiss concerns about overpriced markets by citing a new economy where the old valuation rules may no longer apply. This type of thinking helps to further propagate the bubble whereby everyone is investing with the intent of finding a greater fool. Still, some analysts cite the wisdom of crowds and say that price movements really do reflect rational expectations of fundamental returns. Large traders become powerful enough to rock the boat, generating stock market bubbles. The bubble in closed-end country funds in the late 1980s is instructive here, as are the bubbles that occur in experimental asset markets. According to the efficient-market hypothesis, this doesn't happen, so any data is wrong.Stock market bubble