The bubbles that built America

These six bubbles - from the telegraph to the real-estate boom - show how Americans end up better off after a bubble, says the author of "Pop! Why bubbles are great for the economy" (Harper Collins).

Real estate
With his relentlessly upbeat pronouncements, National Association of Realtors Economist David Lereah became a mascot of the housing boom - and a target of derision when the bubble burst.
Real estate
Thanks to the good offices of Federal Reserve Chairman Greenspan, the U.S. economy cycled almost directly from the dot-com bubble into a real estate and housing credit bubble. As housing prices soared and McMansions bloomed in new subdivisions, the mortgage industry developed funky new products (interest-only and 40-year mortgages) and millions of Americans began to view houses as flippable assets. In 2005, 28 percent of homes bought in 2005 were purchased as investments.

The S&P Homebuilders Index rose six-fold between September 2001 and July 2005. With house prices falling nationwide and subprime lenders plummeting into bankruptcy, the bubble has clearly burst. What will be the upside? It's too soon to tell.

The telegraph

The railroad

The 1920s

The Internet

Real estate

Alternative energy

POP
Fortune's Adam Lashinsky explores why Silicon Valley's premier VCs have that old-time eco-religion. (more)
Robert Shiller called the tech-stock crash just as the Nasdaq peaked. But he is also the expert on the real estate market. And where does he think it's headed now? Uh-oh. (more)

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.