Financial bubbles formed again from "summary" of The Great Crash 1929 by John Kenneth Galbraith
The most significant development in the American economy during the 1920s was the creation of a vast speculative bubble in the stock market. This financial euphoria was driven by a belief in the perpetuity of economic growth and prosperity, leading to a frenzy of stock buying and speculation. As prices soared to unsustainable levels, many investors became convinced that they could not lose, that the market was invincible, and that they were destined to become rich beyond their wildest dreams. The speculative bubble was fueled by easy credit, with brokers and banks extending margin loans to investors at unprecedented levels. This leverage magnified both gains and losses, creating a dangerous spiral of debt that threatened to unravel at any moment. Despite warnings from a few astute observers about the unsustainability of the market's ascent, the majority of investors remained blind to the risks, caught up in the collective delusion of ever-rising stock prices. Inevitably, the bubble burst in October 1929, triggering a devastating stock market crash that w...
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