By Gregory Zuckerman, The Telegraph“The fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed, in view of the silliness of the majority of mankind, a wide-spread belief is more likely to be foolish than sensible”
Bertrand Russell
A few savvy investors - most with little relative experience in real estate, derivatives or mortgage investing - anticipated a historic housing and financial collapse. Their remarkable success begs an obvious question: why did this unlikely group predict the crumbling of the housing market and the resulting pain felt around the globe, even as the experts were stunned by the developments?
Top regulators, including Alan Greenspan, Ben Bernanke, Henry Paulson and Timothy Geithner, were caught flat-footed. Senior bankers like Robert Rubin, Charles Prince, Stanley O’Neal, Richard Fuld and James Cayne oversaw firms that lost hundreds of billions of dollars from mortgage holdings. Top analysts, traders, economists and academics expected housing to hold up. Real-estate, mortgage and derivative investors all missed the huge trade, as did so-called short sellers, investors who go to sleep at night dreaming of calamities they can bet against. (more)
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