“The number of analysts who forecast the mortgage crisis of that magnitude were tiny. Bubbles happen in free markets, it’s just a fact of life.”
I guess that’s one excuse for missing the biggest bubble since Japan blew up. It was too much effort to examine what was going in the fastest growing part of the economy, the part that dominated all growth after the NASDAQ bubble and 9-11.
You had lenders offering half million dollar no doc loans to strawberry pickers. You had real estate agents giving seminars on how to flip houses. You had seminars on how to buy multiple houses for no money down. You had lenders fighting each other to offer mortgage equity withdrawal loans. You had brokers cracking jokes about NINJA clients, No Income No Job no Assets. And they gave loans to these NINJAs, because Wall Street bought the paper.
You had mortgage brokers popping up like mushrooms. Brokers with pipelines to Wall St, where investment banks bought all the subprime paper that the brokers could push and cried for more. You had investment banks whose main income became the securitizing of mortgages, and the exploding industry of derivatives built on those securities.
The evidence was there, in full sight. It wasn’t doomsayers pointing out this stuff, it was in the business press if you bothered to look.
Wow that’s astounding hindsight you have there. For purposes of discussion, I’ll assume you were one such insightful person pre-crash and would have singlehandedly saved people trillions if only they’d followed your wisdom. And actually I’m a prodigious consumer of the “business press” as a financial advisor.
There was, and is, always a handful of people who sieze on a negative trend or economic indicator and proceed to tell us of the tsunami to come. They were a minority voice in the “business press” at the time.
My point to you is that their correct call this once doesn’t make them infallible oracles going forward. If they were bears 3 years ago, bears 10 years ago, bears 20 years ago, and are still bears after a selloff of that magnitude, it ought to raise some questions about their thought process.
If you’re so certain, why don’t you buy a bear market fund right now, then let’s consult again in a year and see who’s the happiest?