This is Planet Money from NPR.

Hey everybody, this is season 2 of Planet Money Summer School, the investing education

that goes in one ear and then stays between both ears.

Today is class 5, bubbles, bikes and biases.

A financial bubble can form in pretty much anything that can be bought and sold.

Could be a single stock or the whole stock market, bonds, houses, bikes, flowers, pokemon

cards, whatever.

All you need is for the price of that thing to go up and up and up beyond what seems justified.

And all that happens before the bubble bursts and the price collapses.

But financial bubbles are also quite mysterious.

Why do they form in the first place?

And how do you know that something is even in a bubble?

Because sometimes a thing does just get popular and then stays popular.

Like you know, podcasts we hope.

And what traits do most bubbles have in common?

Well joining us once again is Planet Money Summer School Professor Vicki Bogin.

Vicki also happens to be a non-podcasting professor at the SC Johnson College of Business

at Cornell University.

Vicki I think we should make this a short class, just one question and one answer.

So here it is.

What causes financial bubbles?

So you've asked the bazillion dollar question.

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