Bubbles and Contagion in Financial Markets provides an introduction to the important topic of asset bubbles and contagion, two key precursors to financial crashes. Interest in market microstructure, market interrelations and contagion has risen sharply following on from the financial crisis and the sovereign debt crisis, and both practitioners and academics are showing increased interest in quantifying and potentially modeling bubbles and contagion effects. This book provides a technical but accessible introduction to bubbles and contagion. While other books in the market report historical episodes, the author instead focuses on the patterns and schemes that can be derived from historical analysis to develop models and a more comprehensive systematized analysis of the phenomena. In volume 1 of 2, the author introduces the background concepts and underlying theory of the topic, exploring macro policy considerations, the role of technical trading and of psychological trading biases, market interconnections, cascade effects and valuation - al; with a focus on readers developing a complete, intuitive understanding of the breadth and depth of the issues and challenges inherent to the area. Although some quantitative aspects will be examined for context, the mathematics of asset bubbles will be explored more thoroughly in volume 2. Bubbles and Contagion in Financial Markets will be a welcome addition to the growing body of literature in and around market microstructure and high frequency finance, and will prove a popular reference for practitioners in trading and quantitative modeling, as well as researchers in academia, who will gain a comprehensive understanding of asset bubbles and the contagion effects of market crashes, and the quantitative aspects involved.