Conventional economics ties itself into knots over bubbles. A less theological tendency says that while markets get it right most of the time, bubbles can arise in the interstices where rationality is less than complete. At the other end of the spectrum, some observers put the phenomenon down to greed and the herd instinct. More recently, complexity theorists have developed new lines of enquiry. Once you describe the market like that, it doesn't matter what institutions surround them.
Volatility is inherent in the system.
At Hertfordshire University's Complexity and Management Centre, professor Ralph Stacey suggests looking at surges like the Internet and biotech companies in evolutionary terms. Unfortunately, neither conventional economics nor complexity theory delivers prescriptions for how new strains of the bubble virus should be treated. Their immunity to official medicine is well illustrated by the present long-running bull market on Wall Street. That depends how much of the rest of Wall Street it brings down with it. This too is unpredictable, although most observers believe there's at least a risk of a sharp US recession.