How Financial Bubbles Work

Illustration for article titled How Financial Bubbles Work

Many experts have warned that the global market is in the midst of a financial bubble that could lead to a crisis, but many people may not understand how such a crisis occurs. The Onion provides a step-by-step guide to how financial bubbles form, grow, and ultimately burst.


Step 1:

Investors speculate everyone has finally forgotten any lessons from last crash.

Step 2:

Couple overjoyed to learn they qualify.

Step 3:

Despite rigorous enforcement, some shady business practices actually make it past ever-vigilant eye of the SEC.

Step 4:

Buy! Buy! Buy! Don’t think, just buy!

Step 5:

Slight possibility arises that heavily invested company which has lost money eight years running may just not have good business model.

Step 6:

Arrow on chart goes from good black to bad red.

Step 7:

Instances of flustered men pulling out their empty pockets skyrockets.

Step 8:

Everyone starts claiming they all totally saw this coming.

Step 9:

Government and financial industry work to diagnose exactly what went wrong and how to fix the fundamental problems that perpetuate damaging boom-and-bust cycle, then decide not to implement any changes.


Step 10:

Crisis declared over when economy returns to being just as bad as it was before the bubble.