Comments on: Fall of the Know-It-Alls http://themoderatevoice.com/23858/fall-of-the-know-it-alls/ An Internet hub with domestic and international news, analysis, original reporting, and popular features from the left, center, indies, centrists, moderates, and right Wed, 15 Feb 2012 04:43:19 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: DLS http://themoderatevoice.com/23858/fall-of-the-know-it-alls/comment-page-1/#comment-161250 DLS Wed, 29 Oct 2008 16:17:20 +0000 http://themoderatevoice.com/religion/ideologies/capitalism/23858/fall-of-the-know-it-alls/#comment-161250 It would be better to study the older books written about the behavior of crowds (money from the stock bubble went into a real estate bubble and everyone believed "This Time, It's Different") as well as the few newer books -- not necessarily the very latest, razor-sharp-hindsight marketing maneuvers, but a bit older -- that discussed this. Oh, and try to avoid the hype we see how, that is not only maybe the start of panic and pessimism but is compounded by media sensationalism and political aims behind reporting of the news.<br><br>Greenspan was "The Maestro" back in the stock bubble. My, how he is reviled now. It would be better to study the older books written about the behavior of crowds (money from the stock bubble went into a real estate bubble and everyone believed “This Time, It's Different”) as well as the few newer books — not necessarily the very latest, razor-sharp-hindsight marketing maneuvers, but a bit older — that discussed this. Oh, and try to avoid the hype we see how, that is not only maybe the start of panic and pessimism but is compounded by media sensationalism and political aims behind reporting of the news.

Greenspan was “The Maestro” back in the stock bubble. My, how he is reviled now.

]]> By: Lipsspeak http://themoderatevoice.com/23858/fall-of-the-know-it-alls/comment-page-1/#comment-161225 Lipsspeak Wed, 29 Oct 2008 15:15:26 +0000 http://themoderatevoice.com/religion/ideologies/capitalism/23858/fall-of-the-know-it-alls/#comment-161225 Diagnoses are based on anomalies. What was different? Whatever was different was the most likely cause of the economic crisis. <br>Subprime loans had been around since the 70s, so that was not different. Selling mortgages to be re-packaged has been around since the 1960s, so that is not different. ARS have been around since the 1980s so that was not differnt. Adjustable Rate Mortgages have been around for decades, so that is not different. <br>The only difference was that the Federal Reserve, who everyone relies upon not to be stupid, lowered interest rates to 1% (not below 3% since 1962) which made everyone act as expected and put this system on steroids. Anomaly #1, BUT that was not the problem. <br>From 2004 - 2006, the Fed raised rates by 4.25% in less than 2 years. Anomaly #2. That was the problem and caused everything. Diagnoses are based on anomalies. What was different? Whatever was different was the most likely cause of the economic crisis.
Subprime loans had been around since the 70s, so that was not different. Selling mortgages to be re-packaged has been around since the 1960s, so that is not different. ARS have been around since the 1980s so that was not differnt. Adjustable Rate Mortgages have been around for decades, so that is not different.
The only difference was that the Federal Reserve, who everyone relies upon not to be stupid, lowered interest rates to 1% (not below 3% since 1962) which made everyone act as expected and put this system on steroids. Anomaly #1, BUT that was not the problem.
From 2004 – 2006, the Fed raised rates by 4.25% in less than 2 years. Anomaly #2. That was the problem and caused everything.

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