cooprider14: I was in the insurance/surety business during the construction boom prior to this last one, and I remember the same nonsense going on, but with surety bonds for construction. Underwriting standards went out the window, and the big sureties would bond anyone who could fog a mirror. When I spoke with the older underwriters, they were all shaking their heads and bemoaning the fact that at some point the music was going to stop, but they (the voices of reason and experience) weren’t being listened to. Rather, the CEOs of these companies were pushing the idea that this boom, unlike all of the others before, was somehow different.
Sound familiar? Your question as to the insights, or, more importantly, the lack of insights, is a good one. Unfortunately, when it comes to making money, even those who should know better generally forget the lessons of history and jump on the bandwagon with everyone else.
