Tulipmania

"Those who cannot remember the past are condemned to repeat it."
- George Santayana

That is a spectacular quote by the philospher Santayana. History has shown that people are susceptible to market bubbles, when some commodity or resource surges in price far beyond its steady state price level. There are several factors, but the fundamental problem usually lies in two causes:

Greed, on the part of market buyers

Greed, on the part of market facilitators

Yes, Greed is the fundamental root cause. But to understand the U.S. housing bubble you have to see that homebuyers are not the sole greedy players. The largest component of the fixed income securities market in the U.S. has been mortgage backed securities, and this revolutionary financial experiment set the stage for the frenzy which has sent housing prices far beyond their rational economic level. Fueling the fire has been the related industry participants whose fortunes grew in parallel with the irrationally skyrocketing housing prices: real estate agents, appraisers, mortgage brokers, and even home improvement retailers.

Remember, there is nothing new or different about the housing bubble, other than we haven't seen such a bubble in the housing market. We have seen many financial bubbles in the U.S., perhaps most recently the internet .com stock bubble. You may recall hearing the phrase: "Noone ever lost money buying a house". All that was needed was for a critical mass of players in the market to believe that falsehood, that you could never lose money buying a house, in order for the U.S. housing bubble to become inevitable. Countless people have made tons of money on the bubble, and many more won't suffer. But there will likely be millions of people who are about to suffer extreme financial loss from the bubble, and the Main Stream Media is failing to cover the subject, and perhaps unwittingly providing a public megaphone to the same market facilitators who caused and profited from the bubble in a doomed attempt to avert the coming collapse.