Whenever you hear about the financial crisis, you always get "housing bubble" thrown into your face.
This housing bubble was one of the main reasons the financial crisis happened, thus it is really important to cover it in our educational series of the financial crisis.
What exactly is a bubble?
Imagine a bubble. It rises and rises, floating higher and higher. Then, suddenly, without any warning, it pops. Boom goes the bubble.
Now, imagine this same scenario with something regarding finances. It's basically when a "thing" shows something promising (for example the real estate market), keeps growing and growing, and then, without any warning, it pops, and causes everything to crash with it.
Other than the housing bubble, there was a dotcom bubble that you may've heard of. This started when the internet became more and more widespread, and people kept investing in ".com" companies that really had nothing to back the great financial support they were getting. This, of course, was discovered later on, and caused all those companies to crash. Pop goes the bubble.
In part II I'll talk a bit more about the housing bubble itself.
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