What's the antidote to that kind of mass delusion? Shiller seems to have no interest in substituting his judgment, or the government's, for the market's. Instead, he sees information and innovation as the counter to group think. An active market in house-price futures and options--Shiller has recently helped launch such securities on the Chicago Mercantile Exchange--would let skeptical speculators prick housing bubbles, he argues. If banks wrote continuous-workout mortgages--in which the terms changed depending on house prices, unemployment and the like--homeowners might be less addicted to rising prices. If government subsidized financial advice for the nonrich, salespeople angling for commissions might be less influential.
Crash Master - Shiller
By now many people have probably heard of Robert Shiller, of the Case-Shiller Index for housing price.
Time has an good story about him, and his pithy advice on how to treat (prevent) bubbles