Between 2006 and 2009 he worked at Citigroup, where he was chief operating officer of Citigroup Alternative Investments, which bet on the collapse of the housing market.

FORBES: Who Is Jack Lew, Obama's New Pick for Treasury Secretary?

The result of this instability is that people make bad decisions, like selling when the market is down, or speculating on alternative investments that they perceive to be a safe-haven.

FORBES: How To Maintain Your Sanity Amid A Market Freak-Out

They are typically short-term investments that banks market as a high-yield alternative to bank deposit rates, which are kept low by the government.

WSJ: China Tightens Regulations on Wealth Management