Hypothetical situation. Let’s say that its the year 2005 and the CEOs and MDs of the major investment houses had half a brain. (OK for this scenario you have to suspend disbelief.) They realize that there is a likely housing bubble and pullback from investing in housing. They only issue a handful of structured finance CDOs and the market for subprime lending dries up. Let’s also say that the government cooperates and relaxes requirements for Fannie/Freddie to lend to the poor. If this occurred what would the US and world economy look like right now? My thoughts…It wouldn’t matter. The housing bubble would still be slowly increasing. More risk taking firms would continue to reap fees on a yet to collapse housing bubble while the more conservative firms that fail to participate will watch as they are left out of the profits. Looking back the 50 straight years in housing appreciation was such an obvious bubble. There are no guarantees in life. When the cost of a new house is several times the cost to build it…you know something’s wrong. But the exceptional greed and stupidity of EVERYONE during there years 2005- half of 2007 just accerated the enviable. What do you think would have happened?
what if the big bang never happened, what do you think would have happened. what if adam never banged eve, what do you think would have happened.
caviar and moet my friend. versus pizza nova and moose light. the latter aint bad actually.
I prefer pizza and beer any day. Everybody does, some just don’t want to admit it.