NPR concluded a mostly good discussion of the oil market with the statement that "you never know when you're in a bubble." This is partially true in that we can never be certain of whether a particular run-up in prices is due to fundamentals or speculation, but of course we can never be entirely certain of anything. There are real fundamentals in any market and a good understanding of these fundamentals will allow one to determine whether or not a particular market is subject to a bubble. It was possible to recognize the stock bubble and housing bubble long before they burst. The economists and analysts who did not recognize these bubbles failed in their jobs in a really huge way. If they held jobs in which workers were held accountable for their performance, they would have been fired.
--Dean Baker