That is when the weakest hands with the most to lose climb on board rickety enterprises. In this case, pensioners may actually get pushed on board by the U.S. government. The drive to get Social Security in the market is one of the few current political initiatives said to have a chance of making it through Congress because some form of stock market investment is the only thing Democrats, Republicans and the White House agree upon. In Capital Hill hearings, Richard Anderson Jr. became the youngest person ever to testify before Congress. Few know that they are living through a mania when it is raging.
Manias are obvious to the majority only in retrospect.
As you can see in the next two charts, in just a single decade, Japan's Nikkei index has returned to its 1950s-1960s value in terms of both the DJIA and Japan's own bonds. The two-decade bubble has been fully deflated relative to these measures. Despite the surface implication of these graphs, Japan's share market deflation is not over, for two reasons. First, every manic advance in the price of an investment has been ultimately more than fully retraced . Second, the U.S. market is itself completing a historic mania, which means that when U.S. stock prices turn down, the Nikkei will have to fall just to keep these two graphs in equilibrium.