The Inner Workings of Bubbles

David Frum: I tend to think of the reasoning that gives rise to bubbles in asset prices as falling into two different categories. One is like horizontal heuristics, where people extrapolate recent price gains forward into the future. The second category are vertical heuristics; they look around and see what others are doing. He says it's certain imitation will play a role but one should not look at this again like a just inner process.