Yeah, many people knew, but they were ignored by those in the industry making money. Every one making money couldn't say lets stop making it, they would have been fired.
People were told, yep the prices are high for houses, that is why you need to buy now, because they are getting higher.
scott 222233 wrote:
Yeah, many people knew, but they were ignored by those in the industry making money. Every one making money couldn't say lets stop making it, they would have been fired.
People were told, yep the prices are high for houses, that is why you need to buy now, because they are getting higher.
Yes. The book The Big Short is being made into a film right now. The book shows how people's behavior tends follows incentives (economic and otherwise), and the incentives at big firms then was to feed the beast. Going against the grain risked your career if you were wrong. The guys in the book who went against the grain and called it out were largely anti-social outsiders, not as influenced by the incentives
Peter Schiff wrote:
I did.
Signed,
Your biggest critic
No one takes you seriously, Dr. Doom.
Hey, where's that hyperinflation you predicted?
7/10
For getting a decent number of responses on a ridiculously outdated topic that has no business being discussed on letsrun, all with only a sentence worth of effort.
run with the wom wrote:
I knew it was going to crash and went to cash in 2007 before the big meltdown in 2008. Ever read "The Big Short" by Michael Lewis? There were many others including the good folks at Goldman Sachs.
Seriously, when I read that when three families of migrant field workers were allowed to qualify for a shared mortgage in around 2006 in the Wall Street Journal one knew that we were in crazy town.
Agreed. I cry B.S. to Bernanke's comments in an ass-covering speech. If you looked at the growth of mortgage backed securities issuance by Fannie Mae and Freddie Mac (not both busted out) you could see an inevitable topping out coming without the need for a degree in economics. Caused by government interference in the free market.
I think I read concerns about the unsustainable housing bubble in the Economist around 2004. Many knew it was coming, they just didn't know when. I think the Republicans thought it wouldn't happen during Bush Jrs' term (maybe hoping they could blame the economy failure on the Democratic policies.)
Really? Bush warned of the impending disaster but was met with huge blowback from the Democrats, all of them getting huge campaign donations from Fannie/Freddie/Goldman etc.
https://www.youtube.com/watch?v=cMnSp4qEXNM
http://georgewbush-whitehouse.archives.gov/news/releases/2008/10/20081009-10.html
Democrats blowback
Good gosh, I was screaming that this would happen!
When I left sports management I got into the mortgage biz. I was already buying foreclosures and using my own money made sold properties but if you had a social security number and a pulse you could get credit lines. People were even paying 40K on a piece of crap property only valued at 30K, the ARMs offered were a joke to get $600 per month renters to own 300K home that offered the same $600 to own but then the rates shot up $1900 six months later really was a recipe for national failure.
BTW Obama was the 2nd highest paid congressman in donations as a junior senator from Chicago..... but somehow it's Bush's fault.
scott 222233 wrote:
Yeah, many people knew, but they were ignored by those in the industry making money. Every one making money couldn't say lets stop making it, they would have been fired.
People were told, yep the prices are high for houses, that is why you need to buy now, because they are getting higher.
true. they said "if you don't buy in now, you'll never own". same thing happening in canada now.
I never got a sense that Fannie Mae and Freddy Mac's role in the bubble was anything more than incidental.Chopping up risky loans, and reselling them as AAA rated loans created a huge demand for bad loans, that couldn't be filled fast enough. Historically low interest rates made loans even more affordable.Blaming Fannie Mae and Freddy Mac (and also CRA) seems like feeble attempts of political deflection, turning the public's attention away from what was a highly unregulated "free market".
what is it? wrote:
Really? Bush warned of the impending disaster but was met with huge blowback from the Democrats, all of them getting huge campaign donations from Fannie/Freddie/Goldman etc.
https://www.youtube.com/watch?v=cMnSp4qEXNMhttp://georgewbush-whitehouse.archives.gov/news/releases/2008/10/20081009-10.htmlDemocrats blowback
https://www.youtube.com/watch?v=IyqYY72PeRMhttps://www.youtube.com/watch?v=hxMInSfanqg
If you remember Robert Krulwich, the excellent economics reporter for CBS and ABC news, who would break down complex subjects using animated pieces - he knew. One of his pieces dealt with the inevitable loan crisis that was on the horizon due to so many borrowers being talked into balloon loans they didn't understand, and no-interest loans that dug them into holes before they could ever get started making a dent in their mortgage debt. I'd estimate he did this report some time between 2004 and 2006. I haven't been able to find the report on Youtube, but it was very similar to this:
Next, us tax payers will be bailing out the thousands of idiots that borrowed $100k+ for a liberal arts degree.
scott 222233 wrote:
Yeah, many people knew, but they were ignored by those in the industry making money. Every one making money couldn't say lets stop making it, they would have been fired.
People were told, yep the prices are high for houses, that is why you need to buy now, because they are getting higher.
You can do a search of Letsrun from that time frame and find plenty of people who knew it was a bubble.
As for they being ignored by people in the industry-- of course they were. Do you really think that mortgage lenders/brokers/etc were going to stop earning money because the houses were dramatically over-priced?
You asked about the housing bubble... I delivered. Next.
Ben Bernanke wrote:
Peter Schiff wrote:I did.
Signed,
Your biggest critic
No one takes you seriously, Dr. Doom.
Hey, where's that hyperinflation you predicted?
Freemarket wrote:
The free market economists of the Austruan school did
as did Ron Paul..
In the 1980's, I got a Computer Science degree at a well known 4 year engineering university with a total cost of 4x$5000, or roughly $20K total cost. It was a state school. My "private" alternative was to go to Notre Dame for a total cost of $40K.Since then, something happened in the university landscape with university prices, and student loans, that terms that drastically favor the banks, at the expense of the students (and likely the taxpayer).
student loans are next wrote:
Next, us tax payers will be bailing out the thousands of idiots that borrowed $100k+ for a liberal arts degree.
rekrunner wrote:
In the 1980's, I got a Computer Science degree at a well known 4 year engineering university with a total cost of 4x$5000, or roughly $20K total cost. It was a state school. My "private" alternative was to go to Notre Dame for a total cost of $40K.
Since then, something happened in the university landscape with university prices, and student loans, that terms that drastically favor the banks, at the expense of the students (and likely the taxpayer).
student loans are next wrote:Next, us tax payers will be bailing out the thousands of idiots that borrowed $100k+ for a liberal arts degree.
I fully expect to be bailing out Millennials with my tax dollar after they spent five years getting a degree in theater arts or sociology of Balkan folk dancing, mostly to do bong hits at Phish concerts, play hackey sack, and disrupt international economic summits which they know nothing about.
More money down the drain to keep the lid on a generation of losers.
I take it you didn't waste your money on a degree?
ScaryStuff wrote:
rekrunner wrote:In the 1980's, I got a Computer Science degree at a well known 4 year engineering university with a total cost of 4x$5000, or roughly $20K total cost. It was a state school. My "private" alternative was to go to Notre Dame for a total cost of $40K.
Since then, something happened in the university landscape with university prices, and student loans, that terms that drastically favor the banks, at the expense of the students (and likely the taxpayer).
I fully expect to be bailing out Millennials with my tax dollar after they spent five years getting a degree in theater arts or sociology of Balkan folk dancing, mostly to do bong hits at Phish concerts, play hackey sack, and disrupt international economic summits which they know nothing about.
More money down the drain to keep the lid on a generation of losers.
Daniel A Gore, Esq. wrote:
I recall going to a financial adviser in about 2005 who told me with a straight face that my then $200K home would be worth $7 million in 2040. I knew a correction of some kind had to be coming. However, the depth and breadth of the crash was still surprising.
Your financial adviser could be right. Inflation is a beautiful thing!
ScaryStuff wrote:
I fully expect to be bailing out Millennials with my tax dollar after they spent five years getting a degree in theater arts or sociology of Balkan folk dancing, mostly to do bong hits at Phish concerts, play hackey sack, and disrupt international economic summits which they know nothing about.
More money down the drain to keep the lid on a generation of losers.
This isn't the 90s anymore, bro.