Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can\u2019t capture. Scripts may contain errors. Please check the corresponding audio before quoting it<\/p>\n
\u00a0<\/p>\n
BUBBLE TROUBLE<\/p>\n
Cold Open:<\/p>\n
(SFX: ELEMENTARY SCHOOL AMBI, KIDS YELLING IN DISTANCE)<\/p>\n
BRIDGET: Hey, Ryan. Are you ready for our big presentation to the 5th grade class today?<\/p>\n
RYAN: Yeah, just organizing my notes. And, look- to entertain and thrill the kids, I brought an old classic, a bottle of bubbles! (BLOWS) SFX BUBBLE POP See? Bubbles! Wooo!\u00a0<\/p>\n
BRIDGET: Um, not to be rude, but I don\u2019t think today\u2019s 10 year-olds are gonna be impressed by bubbles you blow from a little plastic wand. You gotta go bigger. Like this bubble blaster.\u00a0<\/p>\n
(SFX: MOTORIZED BLASTER SOUND)<\/p>\n
BRIDGET: (LOUDER, OVER MACHINE) This thing can blast seventy bubbles a second.<\/p>\n
RYAN: Oh, wow, cool, yeah. But that\u2019s not as cool as this (STRAINING) industrial strength bubble generator I also brought along today.<\/p>\n
SFX: HEAVY OBJECT BEING SET DOWN<\/p>\n
(SFX: EVEN LOUDER MACHINE)<\/p>\n
SFX: BUBBLE POP SFX FROM EARLIER<\/p>\n
RYAN: (LOUDER OVER MACHINE) This is the same machine they use for Broadway shows that take place underwater. Like Spongebob. And\u2026 Chicago.<\/p>\n
BRIDGET: Oh, that\u2019s neat. But not as neat as this giant, human-sized bubble hoop. It\u2019s the circumference of a jumbo-sized hula hoop. And when I stand inside it, it can create a bubble big enough to envelope my whole body.<\/p>\n
(SFX: LOW PITCHED BUBBLING SOUND)<\/p>\n
BRIDGET: (INDECIPHERABLE, FROM INSIDE BUBBLE) Looks like I win!<\/p>\n
RYAN: What? I can\u2019t hear you from inside your bubble.<\/p>\n
BRIDGET: (INDECIPHERABLE, FROM INSIDE BUBBLE) I said, looks like I win!<\/p>\n
RYAN: Hold on, I gotta pop it to understand you!<\/p>\n
(SFX: LOUD POP SOUND WITH SPLASH\u00a0 OF BUBBLE SOAP EVERYWHERE)<\/p>\n
BRIDGET: I said, looks like I win.<\/p>\n
\u2013Theme Music\u2013<\/p>\n
SFX: SCHOOL BELL\u00a0<\/p>\n
(SFX: KIDS FILING INTO AUDITORIUM, GETTING SETTLED)<\/p>\n
BRIDGET: Come on in, have a seat,\u00a0 kids. We\u2019ve got this whole auditorium to fill!\u00a0 Welcome to Million Bazillion. I\u2019m Bridget!\u00a0<\/p>\n
RYAN: I\u2019m Ryan! And We Help Dollars Make More Sense\u2026 That line sometimes gets a laugh, but usually not. I\u2019m not gonna let your silence throw me. I\u2019m a professional, let\u2019s forget it and move on.<\/p>\n
BRIDGET: So do any of you kids have a money question you\u2019d like answered? We\u2019ve got some microphones in the aisles, ready for you to use, don\u2019t be shy!<\/p>\n
JOCELIN: \u201cHi, my name\u2019s Jocelin, my question is: what is the housing bubble and what caused it?\u201d<\/p>\n
RYAN: Great question, Jocelin.<\/p>\n
(SFX: DRAMATIC STING)\u00a0<\/p>\n
BRIDGET: (DARKLY) Uh, yes. The U.S. Housing Bubble of the early 2000s. . A fascinating, even\u2026 heartbreaking subject.\u00a0<\/p>\n
RYAN: (BEAT) Everything ok, Bridget?\u00a0<\/p>\n
BRIDGET: (COMING TO) Uh, yeah! Bubbles, which we\u2019re totally prepared to discuss today since we brought a whole bunch of bubbles to this presentation, by coincidence of course.<\/p>\n
RYAN: Yes, interesting how that tends to happen in these episodes.<\/p>\n
(MUSIC: EXPLAINER MUSIC)<\/p>\n
BRIDGET: To understand housing bubbles, let\u2019s first talk about bubbles – uh, you\u2019re talking about money bubbles, right? Not the soapy ones Ryan is blowing?<\/p>\n
CLASSROOM TOGETHER: Yeah!\u00a0<\/p>\n
BRIDGET: Okay well, money bubbles aren\u2019t super common.\u00a0 They happen only when the price of something gets way higher\u00a0 than what it should really be worth, or its value.<\/p>\n
RYAN: Isn\u2019t\u2026value\u2026 or what something is worth\u2026 the same as the price?\u00a0<\/p>\n
BRIDGET: Not always.. Because sometimes people can be convinced to pay more for something than what it\u2019s worth.<\/p>\n
KID 1: Not me!<\/p>\n
BRIDGET: Well, we\u2019d all like to think so! But if you think you\u2019ve found something that\u2019s gonna be BIG, and\u00a0 the price is going to KEEP going up, and you can maybe sell that thing later on for even MORE money\u2026you might be convinced to over pay.\u00a0<\/p>\n
RYAN: Oh yes, the classic \u201cbuy high, sell higher.\u201d\u00a0<\/p>\n
BRIDGET: Right. Let me start blowing into this bubble wand. [BLOWS] I\u2019m adding air AND excitement for this new money making idea!\u00a0<\/p>\n
(SFX: LARGE BUBBLE BUBBLING + SFX FROM EARLIER, OUR BUBBLE NOISE)\u00a0<\/p>\n
RYAN: Excitement builds and maybe everyone thinks, the price will never come down. Sometimes it\u2019s not even clear WHY people all want to buy something at once. Like childhood, it\u2019s a glorious time of irrational exuberance.\u00a0<\/p>\n
BRIDGET: Right but then, if it\u2019s a bubble, the problem is, people eventually realize, [OVERWROUGHT] wait, maybe this thing is NOT worth the high price after all. Maybe I can\u2019t sell this for more than I paid. Maybe I won\u2019t make any money at all! This fear becomes a sort of self fulfilling prophecy.\u00a0<\/p>\n
RYAN: [DRAMATICALLY] Watch the bubbles start to fall to the auditorium floor! It\u2019s a metaphor!<\/p>\n
BRIDGET: Prices stop rising, people try to sell for cheap to recoup some of their money\u2026and the price craters.\u00a0 The bubble pops. And if you\u2019re one of the last people to jump into the bubble and you paid this really high price for something that suddenly everyone thinks is\u2026worthless, you might kinda feel like you\u2019re the one holding the hot potato when the music stops.<\/p>\n
(MUSIC: END EXPLAINER MUSIC SUDDENLY)<\/p>\n
KID 2: So, how do you know if you\u2019re in a bubble?<\/p>\n
BRIDGET: Well that\u2019s the tricky part. It can be tough to tell you\u2019re in a bubble until it pops\u2013<\/p>\n
RYAN: Pops! Because people changed their minds about it, or because someone made it pop! .<\/p>\n
(SFX: BUBBLE POP, SPLASHING OF SOAP)<\/p>\n
(SFX: KIDS YELL\/GROAN)<\/p>\n
RYAN: Sorry! I was just trying to illustrate the bubble lesson!<\/p>\n
KID 2: You got bubble soap on my iPad!<\/p>\n
RYAN: You kids shouldn\u2019t have iPads in school anyway! When I was in your grade, we weren\u2019t even allowed calculators!<\/p>\n
BRIDGET: Ok, we have to pause to wipe up all this bubble solution, but we\u2019ll learn more about bubbles of all kinds\u2026 when we come back.<\/p>\n
\u2013ARK\u2013<\/p>\n
KIMBERLY: And now \u2026 it\u2019s time for Asking Random Kids Not-So-Random Questions \u2026 Today\u2019s question is: What\u2019s the most valuable thing you own and why?<\/p>\n
—<\/p>\n
Most valuable thing I own is Chippy, because he’s an adorable, cute hamster who is so small and looks like a chipmunk, and I want a chipmunk.\u00a0<\/p>\n
\u200aIn value to my heart, I would say, most of my stuffed animals because I really love them.<\/p>\n
My Barbie Dream House, cause it’s pink and that’s my favorite color.<\/p>\n
My Charizard card because it’s worth like $300\u00a0<\/p>\n
The most valuable thing i own is my stuffies Peggy and Draggy because i love them and there were my mom\u2019s stuffies.<\/p>\n
My house, because it costs a lot of money.<\/p>\n
KIMBERLY: That was \u2026\u00a0<\/p>\n
This has been Asking Random Kids Not-So-Random Questions.<\/p>\n
Part 1:<\/p>\n
RYAN: And we\u2019re back. On today\u2019s Million Bazillion, we\u2019re teaching a fifth grade classroom, all about bubbles- and not the chimpanzee, rather the economic phenomenon where people buy too much of something for too long at too high of a price\u2026<\/p>\n
BRIDGET: \u2026 then the bubble\u2026\u00a0<\/p>\n
KID 1: Yeah, yeah, yeah. The bubble bursts. I think we get the basic idea of a bubble by now. We\u2019re 10, not 2. But we got a question- why do bubbles happen?<\/p>\n
RYAN: Well, this is a great question. And the answer is\u2026 we don\u2019t know.\u00a0\u00a0<\/p>\n
SFX: BRASSY MUSICAL STING<\/p>\n
BRIDGET: No, Ryan\u2019s right. Economists fight over bubbles all the time and they\u2019d love more research into this. Because when a bubble pops, -some people realize they\u2019re unprepared, which they might learn\u2026<\/p>\n
(SFX: DRAMATIC STING)<\/p>\n
BRIDGET: The hard way.<\/p>\n
RYAN: Uhhh, Bridget, everything ok?<\/p>\n
BRIDGET: Uhh, yep. All good. Just drifted off for a minute.\u00a0<\/p>\n
EXPLAINER MUSIC<\/p>\n
RYAN: Anyway, there are still warning signs you\u2019re in a bubble. People are buying something because they can sell it at a higher price later, not because they want it for themselves. There\u2019s a limited supply of something, but maybe not for a good reason. Prices start to go up and no one\u2019s sure why. There\u2019s a bunch of hype about something, again, not clear why. There\u2019s a sense of FOMO, a fear of missing out, if you don\u2019t invest now, at any price!\u00a0<\/p>\n
KID 3: What does \u201cinvest\u201d mean?<\/p>\n
BRIDGET: Oh – Investing is when you put money into some sort of idea or plan that is meant to grow that money. You want to make more than what you put in, over a period of time.\u00a0<\/p>\n
You know, there\u2019s really so much to say about bubbles before we even get to the housing bubble. Let\u2019s not get into the housing bubble just right now.<\/p>\n
RYAN: Ok? But\u2026 why not?<\/p>\n
BRIDGET: In fact, let\u2019s flash back to an example before the housing bubble. Before any of us remember\u2026<\/p>\n
(MUSIC: BAROQUE CLASSICAL)\u00a0<\/p>\n
BRIDGET: Back in the year 1636, the Dutch suddenly got super rich and for reasons I am not totally clear on, they got really into Tulips!\u00a0<\/p>\n
KID 3: Tulips like the flower?<\/p>\n
SFX: BUBBLE BLOWING POPS FROM START OF EP<\/p>\n
BRIDGET: Exactly! It became all the rage to grow really exotic ones. People started buying tulip bulbs, and get this, they weren\u2019t even planting them, they were selling them to OTHER people who bought them only to sell them to OTHER people for even MORE money. Suddenly the price of tulip bulbs was going up 12x what it had been. Some people paid hundreds of guilders for a mere flower.<\/p>\n
RYAN: And how much was a hundred guilders back then? Wait, how much was one guilder?<\/p>\n
BRIDGET: I dunno. But a hundred guilders was a ton. Turns out tulip-mania was short-lived, when- you guessed it, the tulip market crashed and the bubble-<\/p>\n
ENTIRE CLASS: Burst.<\/p>\n
KID 1: Right right, so that\u2019s how that bubble worked. Now what about that Housing Bubble you were talking about?\u00a0<\/p>\n
BRIDGET: Yeah, I just don\u2019t know if you\u2019re REALLY getting what a bubble is yet,, let\u2019s talk about another classic example\u2026the Beanie Baby bubble!\u00a0<\/p>\n
(MUSIC: \u201890s POP TRACK)<\/p>\n
BRIDGET You remember having Beanie Babies, right?<\/p>\n
RYAN: (TISKS) That wasn\u2019t really my scene, Bridget.<\/p>\n
BRIDGET: Well, I had some Beanie Babies. Think Labubus, but cute! They were little beanbag stuffie toys with the trademark Heart tag in their ear. There were even some special edition ones, which some people mistakenly thought were only available in limited quantities. People were convinced that collectors would pay top dollar for those ones. Like collector edition toys or baseball cards.\u00a0<\/p>\n
SFX: BUBBLE BLOWING POPS FROM START OF EP<\/p>\n
RYAN: But the problem with Beanie Babies was, like a lot of popular toys, so many of them were made and sold, there was no rarity- or scarcity- to drive up the value. They were just strangely understuffed animals you could find everywhere-\u00a0 in half of American households, in fact. Though not in mine. I was more into Star Wars action figures. I still have a Jar Jar mint in box. I think its value will explode any day now.<\/p>\n
BRIDGET: Then when people started to question the value of Beanie Babies as(and) if they were really all that rare, and who would want them in the future, surprise, surprise- the bubble burst.\u00a0<\/p>\n
(SFX: BUBBLE POP)\u00a0<\/p>\n
KID 2: So, what about the housing bubble??<\/p>\n
RYAN: Yes, perfect segway, in to the housing bubble-\u00a0<\/p>\n
BRIDGET: Wait, wait, wait, let\u2019s do another example from history because I don\u2019t think you guys really GET this bubble thing\u2026<\/p>\n
RYAN: Bridget, I get the feeling you\u2019re stalling for some reason.<\/p>\n
BRIDGET: But this is a really fun example from the year 2000!\u00a0<\/p>\n
RYAN: (HIGH PITCHED) In the year 2000\u2026\u00a0<\/p>\n
(MUSIC: BOY BAND-TYPE BEAT)<\/p>\n
SFX: BUBBLE BLOWING POPS FROM START OF EP<\/p>\n
BRIDGET: It was around the turn of the millennium and people were really excited about this hot new high tech thing\u2026buying stuff online. . Everyone wanted to invest in new internet companies, or startups as they\u2019re called, thinking it would be their ticket to outrageous fortune. They thought every idea was a sure winner!<\/p>\n
RYAN: One of those ideas was a website called Pets.com<\/a>. It basically sold pet supplies- like doggy chew toys and cat litterboxes.\u00a0<\/p>\n (SFX: PETS BARKING AND MEOWING)<\/p>\n BRIDGET: Did you buy Skimbelshanks\u2019s cat supplies from there?<\/p>\n RYAN: Oh no, this was all long before Skimbelshanks- and most of our listeners- were even born. Pets.com got a bunch of money from investors. They were rolling in it!\u00a0<\/p>\n RYAN: And Pets.com was in deep! In fact, rolling in that VC money, they started to build up excitement by running a ton of commercials on tv with this sock puppet dog mascot They used some of that cash to run a ton of commercials on TV with this sock puppet dog mascot.<\/p>\n