"The mania part of the story is familiar: a new invention will revolutionize the economic landscape and bring forth unimaginable profits. The abundance of credit, coupled with leverage (buying with borrowed money), accelerates this process and buying leads to more buying. Then comes the panic: some event shakes confidence and wakes up investors to the mania that has clouded their judgment. This panic leads to a crash: borrowed money needs to be repaid and investors will sell anything at any price to meet the bankers' needs."
N. Tsafos' review of Manias, Panics, and Crashes: A History of Financial Crises (Wiley Investment Classics) by Charles P. Kindleberger
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