When you talk about panics you're usually talking about the bursting of a bubble. Bubbles happen because people expect future demand to be far above sustainable levels. If you look at the 29 crash, the tech bubble, or the housing bubble, they were fueled by speculation that demands for stocks/property would drive prices higher for the foreseeable future. Now the initial popping of the bubble usually occurs because of insufficient demand relative to expectations. If you want to oversimplify things, you can picture a local housing market where investors are building houses and selling them rapidly and making a decent profit. As time goes on prices get higher, but people still buy up these new houses. One day, an investor lists his brand new house for $1 million and no one buys it. People realize that the demand at this price level isn't what they expected. Then the market floods with excess supply as everyone is trying to get the best deal before prices drop even lower. That can be boiled down to a case of excess supply relative to previous expectations. It can happen with houses, stocks, beanie babies, [url=http://en.wikipedia.org/wiki/Tulip_mania]tulips[/url] or basically anything else. tl;dr Yes