Fri, 10 Feb 2012, 12:05am PST
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Many people didn't know it was a bubble and you should read this as proof: http://en.wikipedia.org/wiki/David_Lereah
And even those who thought it was a bubble never thought it would crash. They thought it was a new normal, that real estate was really more valuable. I remember people saying it had to go up because there was no more land in the bay area, blah blah blah.
There was mass media arguments that the bubble was sustainable, even for those who knew it was different. Even smart people on business news desks were surprised at the crash.
But it was a premeditated bubble, and planned a long time ago at Basel 2 in 1998. Again, that meeting brought out off balance sheet hiding of bad loans AND a false math assumption as to the risk of all mortgages defaulting at the same time. That mispriced the CDO risk and easy money flowed from that. It was planned years earlier than it happened.