The housing and subprime issues were the fodder for every economic fear monger, rightly, for literally years (and honestly if you think otherwise, you have absolutely no knowledge of the financial markets). So why then didn't everyone just pull out of the market? Well, eventually they did, and that was what caused the crash. But preceding it was effectively a game of chicken where people still want to make money trading papers, and if they think they can buy something today that they can sell for more tomorrow, even if they think the next day it might be worthless, many will do that. In the same way that the world is pretty certain we're going to run out of oil...so we use more of it than ever. We'll deal with it running out when that actually happens.
There was zero specificity in Taleb's proclamations. It was just the vague "there are a lot of debts and an inflated housing market that is bound for a correction and is immensely interest rate dependent". Yeah, that's great, but is the same thing everyone else was saying.
GM went bankrupt during the financial crunch. This may blow your mind but the bankruptcy of GM was predestined for years -- their debts kept growing larger while their profits stayed static or shrank.
Everyone knew it was coming, it was only a question of when and what would precipitate it. Yet, people still traded in GM. Exactly the same concept -- people don't trade on what they think will happen tomorrow or next year, they trade on what they think other people think will happen tomorrow or next year.
So there is no misleading, and honestly only "rubes" fall for the "I predicted this" bit.
>>> were the fodder for every economic fear monger, rightly, for literally years
You realize "everyone" and "every economic fear monger" are very distinct groups? Before the crisis struck, those fear mongers were generally thought of as curiosities or cranks, not visionaries. It wasn't that long ago, too early yet to rewrite history.
were pretty popular. At the last one, we've got excellent review from top people at Federal Reserve and Fannie Mae.
>>> There was zero specificity in Taleb's proclamations.
Huge surprise from a guy who talks about principally unpredictable events as the basis of his philosophy. You expect him to talk about black swans and then say "the market would go down X points at day Y"?
>>> In the same way that the world is pretty certain we're going to run out of oil.
There was zero specificity in Taleb's proclamations. It was just the vague "there are a lot of debts and an inflated housing market that is bound for a correction and is immensely interest rate dependent". Yeah, that's great, but is the same thing everyone else was saying.
GM went bankrupt during the financial crunch. This may blow your mind but the bankruptcy of GM was predestined for years -- their debts kept growing larger while their profits stayed static or shrank.
Everyone knew it was coming, it was only a question of when and what would precipitate it. Yet, people still traded in GM. Exactly the same concept -- people don't trade on what they think will happen tomorrow or next year, they trade on what they think other people think will happen tomorrow or next year.
So there is no misleading, and honestly only "rubes" fall for the "I predicted this" bit.