What makes a tire bulge?

You have a broken steel/fiber ply belt in the sidewall of the tire. Normaly this is caused by two things, a manufacturing defect or a heavy impact to the tire side wall (like hitting a pot hole). You need to get the tire replaced as soon as possible as it is a huge safety hazard because the integrity of the tire has been broken (hence the bulge as it starts to loose shape). This might cause the tire to blow making you to loose control.

Go to either Costco (my favorite) or Sams club to get another tire. Because they have lifetime balancing and rotation it is well worth paying for a membership. I would also highly recomend getting Michelin tires (for cars or tight duty trucks) or BF Goodrich tires (owned by Michelin - for SUVs or truck tires)