A good review of this subject but there's something about the "there's nothing we can do about it" view that strikes me as being way too sanguine about being non-sanguine. I've heard this view espoused before, that bubbles are not avoidable...well, perhaps, but then why not simply advocate for getting rid of all financial regulation? Or perhaps this is not best described by an either/or, on/off model--since it seems like a given to me that the size and extent of the bubble are important. And my general impression is that many, many people were aware that they were giving loans to people who could not repay them (to cite one example where delusion did not seem to interfere with rational thought) but rather, everyone was chasing bonuses and commissions for themselves. So while the Mass Delusion hypothesis might explain some of the variance in terms of behavior, we should really hesitate before ascribing the whole thing to world-wide insanity. Perhaps, as Paul Krugman noted, banking needs to be boring again. And I think any full analysis would have to include nations where there was not a bubble, i.e. Canada.