Why Was Anyone Surprised By the Crash?

[Zero]

Why Was Anyone Surprised By the Crash? (click)

Everyone who lives in society should listen to this. Very illuminating view of the collapse by Peter Schiff, and very entertaining in many parts. It sort of goes between economics and stand-up comedy in parts. Good stuff.

"What are going to be the consequences of what we're doing now? What I think is going to happen is that, ultimately, people like the Chinese, and the rest of the world - the Saudis, the Japanese, and everybody else, they're going to figure it out and they're not going to want to play this game anymore.

We've got a con right now. You know, in my book, Crashproof, I compared it to Tom Sawyer. There was a passage in Tom Sawyer where Tom gets everbody, all the kids in the neighbourhood, to whitewash his fence - and he gets them to pay for the privilege of doing his chores. And, you know, when Mark Twain wrote that passage he probably had no idea it would one day form the basis of the global economy."

edit :

Same thing - now in *video* (ooh, ahh)

<embed src="http://www.youtube.com/p/4AF1DDFDE3385D96&hl=en" type="application/x-shockwave-flash" width="480" height="385"></embed>

[Ainkor]

Interesting side note about the crash. Back in 2002 we rented a house in the southern Twin Cities metro in Minnesota. The guy who owned it asked if we wanted to lock in a purchase price at $200,000. It was a 5 bedroom house, finished basement and it seemed like a steal of a deal when the housing prices in this small town were jumping 10-15% every year. We figured that at the end of our lease we would buy it at the 2002 price and possibly make some cash off it.

Fast forward 6 years, the houses in that area are worth about 140-180k.

We moved away and did not buy the house and I am glad for that! While we could have afforded the payments I much prefer to remain "mobile" We have always moved were the money is.

I figured the landlord was a crazy old bat (he was a really nice guy though) and was always ranting about this coming crash.

We also almost purchased a house in 2004. We sat down with the mortgage broker and had all the papers in front of us ready to sign but something didn't feel right. I backed out at the last moment because I was uncomfortable with an adjustable rate mortgage and who the hell knows what will happen with the rates.

Interesting to reflect on. Looking back, all of the signs were there and while I did not take it as much of a surprise, many of the folks I know in the hedge fund business were busy making as much money as they could because they knew as far back as 2000 that something was coming.