normal predictability of rise and fall of market went out the window with the price run-up this time around.
afterall, yes you can predict the price increase.
and yes you can predict the extension of the price run-up when the interest rate dropped and lending standards loosened.
but how many could actually predict wide-spread fraud and inflated appraisals and 6 figure cash backs?
and how many could predict that in ’06 the subprime lenders aggressively dropped ALL standards to keep the numbers up.
I think a lot of bears may have been able to predict the run-up to 2004. But the continued strength in ’05 and early ’06 was completely artificial manufactured by the interested parties to keep the party alive a couple of years longer. and that was completely unpredictable.
