My first bubble must have been the real estate bubble that developed during the Carter Presidency. Housing prices in my Northern California region were popping up 2% a month. Everyone and their uncle suddenly wanted to buy a "fixer upper" and cash in.

That bubble burst sometime late in 1979, if I recall properly, which I should since I owned a real estate company at the time. I knew the end was near for that bubble when suddenly the investors showing up in my office weren't grizzled old pros, but average Joes. "Hi, my neighbor and I scrapped together five grand and we want to invest it in a fixer upper," they'd tell me.

I took that as a sure sign that the jig was up. I sold my office and went looking for another line of work. That turned out being the newspaper business, which is a story for another day.

After that I avoided bubbles until 1996, when I suddenly found myself in wallet deep in a San Francisco Internet startup, Quokka Sports. Eeeeeeeeeeeeeeeeeha! What ride that was. We burnt through $164 million in venture capital money in less than 40 months. And when the dust settled in 2001 all that was left were 438 over-priced Herman Miller desk chairs, a ping pong table and a couple of tons of empty Cheeto bags.

Of course, we were just one of hundreds of dot com companies that flared like new-born stars, burnt brightly for a short time, then went super nova, leaving nothing behind but a big ass echo and lot of dust. (The dust would be all that dot.com stock ordinary folks bought like lemmings at the top of the curve…. as they always do - just like those two neighbors I mentioned above who were gonna get rich buying fixer uppers..)

That's the way of bubbles. They are fueled by hope, greed and -- most of all -- other people's money. And the money is easy to get. Hell the bubblemisters don't even have go get the stuff. Other people bring it to them  by the truckload and beg them to take the stuff.

When the bubble bursts the bubblemisters shrug and mumble things like, "Oh well, nothing ventured, nothing gained," and "Hey, don't blame me, you're the one who begged us to let you in on the action." (My favorite rationalization during the dot.com bubble came when a reporter asked a venture capitalist why they continue funding CEOs who ran failed dot.com companies. "Because you can't encourage risk-taking by punishing failure," he replied. Easy for him to say, since he was investing what? - Other people's money.)

But the real problem with most bubbles is not that people lose money. The real problem with bubbles is that the amount of money lavished on bubble-stuff rarely creates anything near the amount of  useful tangibles that could have invented/produced with the commensurate amount of money.

Nobel Prize winning economist and columnist, Paul Krugman recently wrote;