Throughout history, some of the most spectacular financial crashes have been fueled by products that, in hindsight, nobody actually needed. These weren’t just simple miscalculations; they were full-scale systemic failures driven by speculative enthusiasm for financial innovations that lacked actual demand or any lasting value.
The same pattern keeps repeating: a product gets hyped, investors rush in, prices soar, and then—inevitably—the whole thing crumbles.
Take the 2008 financial crisis. The whole mess was set off by mortgage-backed securities (MBS) and collateralized debt obligations (CDOs). Sounds complicated, but at their core, these were just bundles of risky mortgages sold as “safe” investments.