If you ever want a story to indicate the bubble nature of the 2002-2007 financial sector, Felix Salmon points us to Jesse Eisinger's profile of Bill Ackman:
In 2007, he set up a special fund to invest in a single stock in a highly leveraged way. In a sign of how frothy the markets were, he raised $2 billion from start to finish in a week, about two-thirds of which came from other hedge funds. Investors knew the outlines of the investment but not that it would be in Target.
Brad Stetser gives us this picture of the flow of emerging market reserves to the rest of the world (US and Europe). It is hard to imagine that these two stories are not related.