Over at SLOP, Scott Lewis wonders what I think of developer Sherm Harmer’s assertion that nobody anticipated the troubles in the subprime mortgage market. Scott quotes Harmer as saying, "We did not anticipate the subprime financing issues," and then, referring to those issues, "It was not on anybody’s radar screen. It surprised the best banks, the best investors. No economist predicted that."
Here’s what I think. The subprime financing "issue," in a nutshell, was this: lenders had been making loans that were very unlikely ever to be paid back. Then they stopped.
Anticipating that second part just doesn’t seem like such a stretch to me.
read more at voiceofsandiego.org
This line of inquiry can
This line of inquiry can only be about calling people out on the carpet, which is fine with me. Does anyone really expect someone hyping the market for financial gain to say, “sure saw it coming all along so I spoke convenient truths so I could make more dough and hopefully do some damage control before things got too obviously bad.” ?
There’s no doubt that many
There’s no doubt that many saw this coming, but to admit to it post event is obviously anathema. I think the question is what could have been done to prevent it, at what stage, and by whom?
IMO the blame is with the
IMO the blame is with the FED and the GOV. and the people who influence them. However since that is not us, all we can do is entertain ourselves pointing fingers at small bit players who, however unscrupulous, are in other ways more like us or drop it.
Graham
This is my first day
Graham
This is my first day in the site and it is clear that the author saw the mortgage and price crisis very well. Indeed it is a pity that the Wall St Journal/ Bloomberg etc were not quoting the words of wisdom a year ago at least and then Congressmen could have longer to catalyse alleviating measures.
The foreclosures to sales ratio is really clever.
I say the above as an ex professional macro-economist.