TBT: Looking at financial bubbles, we could see that stock markets, cupcakes, tulip bulbs, and real estate have a lot in common.
Whether looking at 1637 or 2000, markets and financial bubbles always seem to find each other. As a surge in demand pushes prices up, the result resembles a bubble because it is full of air rather than value.
Whether it’s tulip bulbs or Beanie Babies, bubbles start with an innovation that excites people. Then a demand surge, an unrealistic boom and panic follow.
NPR’s Planet Money has been looking for the people behind a mortgage backed security. The story, almost like a page turner mystery, began with a $1,000 purchase. With $1,000, Planet Money reporters purchased a tiny piece of a mortgage backed security composed…