Okay, here's a new way of looking at things: perhaps irrational exuberance isn't the bane that we thought it was. Okay, maybe investors took a financial bath by loading up on tulip bulbs back in the 1600's or shares of pets.com in the 1990's - but hey, they were contributing to the greater good!

Or so goes Daniel Gross' reasoning in his new book Pop! Why Bubbles are Great for the Economy.  These trends, especially in America, have provided the audaciousness and courage necessary to create the great innovations of our time. If you're like me then you look back at the dot.com era with a sense of embarrasment about some of the stocks you might have bought, but it was that flurry of excitement and tenacity that spawned Google and other groundbreaking companies. And, as Gross points out, "...it is clear that some bubbles—some, not all—leave behind something that is a little bit boring but extremely useful: infrastructure." When the NASDAQ collapsed in 2002 it didn't just leave a black hole behind.

It remains to be seen how this phenomenon will pan out for the real estate sector. The days of buying a starter bungalow for $500,000 and flipping it a month later for $650,000 after throwing on a new coat of paint are probably behind us, but the roller coaster has breathed a lot of life into the market. Bad business models have blow up (New Century Financial proved to all of us that pitching negative amortization 40 year mortgages to cliens w/ shaky credit wasn't such a great idea after all) but in it's wake we should see greater transparency and smarter decisions by self-interested businesses. And the emergence of companies like Redfin will be welcomed by real esteate clients in general, and investors in particular.