Warren Buffett brilliantly explains how bubbles are formed

In an interview with the Financial Crisis Inquiry Commission (FCIC) back in 2010, Warren Buffett answered several questions about what he thought caused the housing and credit bubble.
During the interview process, he also gave a crystal clear explanation of how bubbles are formed.It's a great read for anyone interested in investing or behavioral economics.
The interview comes from a recent document dump from the National Archives, which released transcripts, meeting agen