There was a very interesting piece written by Karen Blumenthal in The Wall Street Journal yesterday. Blumenthal takes a look at the Beanie Baby craze and how we can all learn from the "Beanie Baby Bubble." Blumenthal has studied bubbles and has determined that there is a pattern that drives these economic phenomena - be it Beanie Babies, real estate, or "Dot Coms."

Blumenthal contends that bubbles need these characteristics: fertile ground, people getting on board, ignoring warnings, greed, and an after-party. Think about the fertile ground, when Beanie Babies first came out, there was a fertile ground. Kids, parents, and grandparents were looking for a new toy, one that could be both a cherished heirloom and a cute adornment for mantles, dressers, and the back window of Cadillacs. The ground was fertile, and this group quickly jumped on board the Beanie Baby train and pushed the prices to a point where some people would pay upwards of $100 for a $5 bean-bag animal.

With prices of TY's Beanie Babies trading well off the highs they reached toward the end of the last millennium, Treasury Secretary Hank Paulson announced that the administration will inject $300 million into the market with open-market purchases on eBay (NASDAQ: EBAY), and at flea markets, garage sales and thrift shops.

In a statement, Federal Reserve Chairman Ben Bernanke told reporters that officials "recognize and acknowledge that the immediate cost to taxpayers is substantial, but we believe that this is a necessary move to shore up confidence in the secondary market for plush animals, and going forward, anticipate that this measure will deliver long-term value to taxpayers as the market bounces back."

In anticipation of the announcement, Morgan Stanley (NYSE: MS) CEO John Mack has been buying up depressed stuffed animals including Seaweed the Seal, Peanut the Royal Blue Elephant, Harry the Hampster and Runner the Mongoose. He told analysts on a conference call that as the federal cash infusion shores up the market, the bank will be able to report mark to market gains that will improve its capital position and reduce the need for further dilution of shareholders.

In a related story, some mutual funds are calling on the government to impose strict penalties on schoolyard bullies who make fun of kids for playing Pokemon cards, suggesting that the taunting adds fuel to an already volatile market.

Full Disclosure: Nothing in this post is true.