3 Bubbles That Burst

iStock
iStock

Like many young people, I'm gradually coming to terms with the sad fact that I won't be able to retire at 25 with the fabulous wealth I accumulated through shrewd sports card speculation in the late 80s and early 90s. While it's disappointing to learn that one can't trade his stack of Harold Miner rookie cards for a new car, there's some small solace in knowing that you weren't the only person to be caught in a bubble. (At least be thankful that you had baseball cards and not, say, Pets.com stock.) Let's have a look at three other popped bubbles:

Tulipmania

Although tulips are inextricably linked to the Netherlands in most peoples' brains, the flowers didn't actually start growing in the area until the late 16th century, when bulbs were imported from the Ottoman Empire. When the plants finally found soil, though, they quickly became immensely popular. Every Dutch aristocrat longed for a garden full of the beautiful, rare spring flowers, and tulip bulbs were suddenly the Netherlands' hottest commodity. Even better, the country's booming trade with the New World had given the potential buyers purses full of disposable income, so there was nothing to keep a boom from taking off.

By 1623, the market for tulip bulbs was starting to warm up, and by 1636, it was overheating. Although the surviving evidence is largely anecdotal, there are stories of collectors being offered the equivalent of year's pay for a single bulb"¦and turning down the offer. Speculators traded their houses and livestock for bulbs they thought they could flip for a large profit, and professional tulip traders peddled their wares throughout the country. Enterprising traders were even offering what amounted to futures contracts for bulbs they intended to plant at later date; this practice was decried as the "tulip wind trade" because the buyers rarely got any sort of tangible return.

The deathblow for the craze didn't come until February 1637 when a group of traders gathered in Haarlem to auction their bulbs. No one seemed interested in buying the bulbs, though, and the traders began dumping their bulbs at reduced prices. The public, though, had already begun to panic and wanted no part of the tulip trade. Certain varieties lost 99% of their value in a matter of days, and speculators faced financial ruin.

Some modern academics have questioned whether these tales of the tulipmania's scope are a bit exaggerated, but the tale is still recounted as a cautionary tale after a speculative bubble bursts. At the end of the day, wouldn't you rather have a garden full of tulips than a portfolio full of dot-com stocks?

The South Sea Company

The South Sea Company was established in 1711 as the exclusive English trading partner with Spain's holdings in South America. As the plan went, the treaty ending the War of Spanish Succession, which was being fought at the time, would grant the company extensive trading rights with these colonies. The South Sea Company could provide the colonies with slaves, and an even more rewarding racket could be built around trading English cloths and textiles to the natives for precious metals and jewels.

However, when the war finally wound up with the Treaty of Utrecht in 1713, the trading rights weren't as extensive as the South Sea Company's shareholders had hoped. The company could only send one general-commerce ship to South America each year, and contentious relations with Spain meant that these voyages were vulnerable to harassment by the Spanish navy. Although the South Sea Company was fairly efficient as a slave trader, it didn't seem to have the huge long-term potential that its directors claimed.

The company continued to hawks its potentially lucrative trade in the Americas as a great business opportunity, though. The South Sea Company began taking on England's war debts and converting them into equity in the company. For the holders of these debts, converting them into South Sea Company stock seemed like a great way to get in on an up-and-coming commercial enterprise, while the company itself gained a steady revenue stream as the country paid off war debts it now held. In 1720, Parliament agreed to let the company take over an even larger share of the country's debt, and the company's stock went through the roof. Stock prices rose from 128 pounds in January to over a 1,000 pounds in August, and investors were euphoric.

There was a slight hitch, though; this whole endeavor was something of a pyramid scheme. The company was trading its equity for the government debt, but the underlying trading business with South America was fundamentally weak. As investors gradually realized that the South Sea Company had very little in the way of actual products or services to offer, the stock price collapsed. In short, all of this government debt had been converted into stock in a company with comparatively meager prospects for future earnings. By September 1720, the price had dropped all the way back down to 150 pounds a share and continued falling.

This precipitous drop undercut the entire British stock market, and investors wanted answers. The ensuing investigation showed that the South Sea Company had been allowed to get away with such shaky business practices in part because it had bribed officials with cash and free stock. Not everyone lost out on the transaction, though; Robert Walpole, a longtime critic of the company and reformer following the collapse of the South Sea Bubble, parlayed his role in straightening this mess out into the role of the first de factor prime minister.

Beanie Babies

Nothing says "Destined to hold its value indefinitely" quite like a teddy bear stuffed with plastic pellets. Or so collectors thought in the late 1990s when Beanie Babies, the plush stuffed animal brainchild of Ty Inc. founder Ty Warner, were sweeping the national collecting market.

What made these little stuffed critters a billion-dollar industry that sucked in both children and scores of adults? A number of factors contributed to the beanbags' meteoric rise as collectibles. Ty's brass originally envisioned the product line as a set of inexpensive, high quality stuffed animals that kids could afford. Prices were generally around $5, low enough that kids could get the whole set of Beanies. Ty eschewed normal distribution chains for stuffed animals; the company avoided big chain discount retailers in favor of smaller gift-shop type outlets, a decision that made the product seem classier and rare.

Moreover, the Beanie Babies themselves received constant tweaks. Colors or names changed, their trademark ear tags would be subtly redesigned, and, most importantly, Ty retired certain models, further spiking collector demand.

As you may remember, the secondary market for the toys absolutely exploded. By 1996, Beanies had graduated from kids' fad to full-blown collecting craze. It seemed that almost any Beanie could conceivably become the next hot limited edition, so collectors snapped them up as soon as they hit store shelves. A royal blue Peanut the Elephant, which was only produced in limited quantities for a short time in 1995, could sell for over $3000. Other individual Beanies, like a wingless Quackers the Duck, fetched prices well over $1,000 apiece. The good times were never going to stop rolling, and Beanie Babies seemed poised to replace the less-adorable dollar as the nation's currency.

That is, until the good times promptly stopped rolling. By 1999, the craze had started to lose its steam. Most of the newer toys hadn't appreciated like their predecessors, possibly because the market was so flooded with bean-filled animals. (Ty's revenues had ballooned to over $1 billion, which represents an awful lot of stuffed bears flowing into collectors' hands.) In 1999, Ty announced it was completely retiring the entire Beanie line, and although a fan outcry convinced the company to revive the line in 2000, the hysteria was dead.

Certain rare Beanies still have significant value, but they're far below their heady late-90s peaks. Peanut the Elephant seems to be bravely soldiering on; two examples of his royal blue variant sold for $1100 and $2000 on eBay last week. These examples are exceptions, though; the great bulk of speculative Beanie purchases seem to be worth a few bucks at most.

Ethan Trex grew up idolizing Vince Coleman, and he kind of still does. Ethan co-writes Straight Cash, Homey, the Internet's undisputed top source for pictures of people in Ryan Leaf jerseys.

Take Advantage of Amazon's Early Black Friday Deals on Tech, Kitchen Appliances, and More

Amazon
Amazon

This article contains affiliate links to products selected by our editors. Mental Floss may receive a commission for purchases made through these links.

Even though Black Friday is still a few days away, Amazon is offering early deals on kitchen appliances, tech, video games, and plenty more. We will keep updating this page as sales come in, but for now, here are the best Amazon Black Friday sales to check out.

Kitchen

Instant Pot/Amazon

- Instant Pot Duo Plus 9-in-115 Quart Electric Pressure Cooker; $90 (save $40) 

- Le Creuset Enameled Cast Iron Signature Sauteuse 3.5 Quarts; $180 (save $120)

- KitchenAid KSMSFTA Sifter with Scale Attachment; $95 (save $75) 

- Keurig K-Mini Coffee Maker; $60 (save $20)

- Cuisinart Bread Maker; $88 (save $97)

Home Appliances

Roomba/Amazon

- iRobot Roomba 675 Robot Vacuum with Wi-Fi Connectivity; $179 (save $101)

- Fairywill Electric Toothbrush with Four Brush Heads; $19 (save $9)

- ASAKUKI 500ml Premium Essential Oil Diffuser; $22 (save $4)

- Facebook Portal Smart Video Calling 10 inch Touch Screen Display with Alexa; $129 (save $50)

- Bissell air320 Smart Air Purifier with HEPA and Carbon Filters; $280 (save $50)

Video games

Nintendo

- Legend of Zelda Link's Awakening for Nintendo Switch; $40 (save $20)

- Marvel's Spider-Man: Game of The Year Edition for PlayStation 4; $20 (save $20)

- Marvel's Avengers; $27 (save $33)

- Minecraft Dungeons Hero Edition for Nintendo Switch; $20 (save $10)

- The Last of Us Part II for PlayStation 4; $30 (save $30)

- LEGO Harry Potter: Collection; $15 (save $15)

- Ghost of Tsushima; $40 (save $20)

Computers and tablets

Microsoft/Amazon

- Apple MacBook Air 13 inches with 256 GB; $899 (save $100)

- New Apple MacBook Pro 16 inches with 512 GB; $2149 (save $250) 

- Samsung Chromebook 4 Chrome OS 11.6 inches with 32 GB; $210 (save $20) 

- Microsoft Surface Laptop 3 with 13.5 inch Touch-Screen; $1200 (save $400)

- Lenovo ThinkPad T490 Laptop; $889 (save $111)

- Amazon Fire HD 10 Tablet (64GB); $120 (save $70)

Tech, gadgets, and TVs

Apple/Amazon

- Apple Watch Series 3 with GPS; $179 (save $20) 

- SAMSUNG 75-inch Class Crystal 4K Smart TV; $998 (save $200)

- Apple AirPods Pro; $199 (save $50)

- Nixplay 2K Smart Digital Picture Frame 9.7 Inch Silver; $238 (save $92)

- All-New Amazon Echo Dot with Clock and Alexa(4th Gen); $39 (save $21)

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Where Did the Term Lame Duck Originate?

Not a lame duck.
Not a lame duck.
Saeid Anvar, Pexels

Since new U.S. presidents and members of Congress elected in November don’t actually take office until the following January, this creates an awkward gap for their predecessors. With diminished influence and little time to enact new policies, they’re often referred to as lame ducks. In other words: Their capabilities are limited and their days are numbered.

It’s not exactly true that lame-duck politicians can’t get anything done during that period. Because they no longer have to worry about keeping their constituents happy enough to get reelected, they’re free to make decisions that might not be popular with the people they govern. But while the term lame duck is now often used to refer to any outgoing politician in general—regardless of whether or not they’re figuratively limping through the end of their term—it wasn’t always that way. In fact, the phrase didn’t even originate in politics.

According to the Oxford English Dictionary, the earliest known reference to the phrase is from a letter written by British nobleman Horace Walpole in 1761. “Do you know what a Bull, and a Bear, and a Lame Duck are?” he asked. Walpole was alluding to the London Stock Exchange, where lame duck described an ill-fated investor who defaulted on their loans. Ten years later, playwright David Garrick mentioned the phrase in his prologue for Samuel Foote’s play The Maid of Bath: “Change-Alley bankrupts waddle out lame ducks!”

An illustration of the London Stock Exchange in 1810.Thomas Rowlandson, Augustus Charles Pugin, John Bluck, Joseph Constantine Stadler, Thomas Sutherland, J. Hill, Richard Harraden, Wikimedia Commons // Public Domain

British citizens continued to utter “lame duck” when discussing the stock exchange throughout the 19th century, at which point it started to gain traction among U.S. financiers, too. Before long, the term had bled into other spheres of influence. Writer George W. Bungay, for example, co-opted the phrase to call out early temperance supporters who had lost faith in the movement.

“In Wall Street, New York, we have a class of men known as ‘lame ducks': they have met with financial disasters, and can not keep pace with their more successful competitors. We have lame ducks in our temperance associations, and I will briefly classify some of the men and women who do not and who will not keep up with our progressive organization. The lame ducks were once out-and-out friends of ‘the cause,’” Bungway wrote in 1869. “When they have attempted to swim in whisky, they have become ‘dead ducks.’”

The phrase might have made some small impression on Bungay’s teetotaler readers, but where it really started to stick was in politics. According to The Phrase Finder, The Congressional Globe used lame duck to describe “broken down politicians” back in 1863, and it had started to appear in newspaper articles referencing politics not long after.

In the early 1920s, lame duck made one final, flying leap to the highest office of the land. A 1926 editorial from Michigan’s Grand Rapids Press, titled “Making a Lame Duck of Coolidge,” speculated about how the upcoming Senate elections could affect the last two years of Republican Calvin Coolidge’s presidential term. If voters managed to flip the Senate to a Democratic majority—or at least closer to it—they could possibly render him ineffective.

In that case, the phrase lame duck wasn’t used in reference to the time between getting elected (or reelected) and taking office, but it soon became linked to that period specifically. Back then, presidential inaugurations occurred in March—the same month a new congressional session began. The lengthy interlude between November and March gave rise to lots of lame duck politicians, and Congress finally decided to shift the start of congressional and presidential terms from March to January. The 20th Amendment, ratified in 1933, was even sometimes called the “lame duck amendment.” Lame duck behavior may have decreased after that, but the phrase’s popularity still hasn't waned.

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