Crashes are rational?

A timely piece this weekend in Slate titled Buy! Buy! Buy! Sell! Sell! Sell!: The rational explanation for stock market frenzies and crashes. Tim Harford links to a paper by economists Jeremy Bulow and Paul Klemperer that takes on the "greater fool theory" that seems to be very popular:

Most people prefer the simpler explanation that investors are just dumb. Bulow and Klemperer did not prove that investors are rational, but they did show that since rational investors will still look at what other investors are doing, the result will sometimes be price drops and spikes that seem whimsical.

Maybe. Or maybe it's a combination of rational behavior colliding with greater fools. I seem to fall into the latter category far too often.