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I learned a very valuable lesson from reading Housing Bubble blogs and what not during the 2008 Financial Crisis. I prided myself on being one of those people

I learned a very valuable lesson from reading Housing Bubble blogs and what not during the 2008 Financial Crisis. I prided myself on being one of those people who saw it before it was happening, and had purchased double shorted bank ETF's. I thought I was a genius by "getting news first" and acting on it, and seeing the money I was "making". But then the Government stepped in and said they would not let the banks fail. My position evaporated into thin air.

Gibbon1 10y ago
You learned half the lesson. The other half is the over-class will force the government to do whatever is needed to keep them from going bust. My dad claimed that the biggest mistake he made financially was when Chrysler was going bankrupt in in the early eighties. He knew that it was politically impossible for the government to let Chrysler fail. However my dad didn't follow through and sock the 100k he had into Chrysler stock. I did the same thing. I knew in January 2009 that the slide in financial stocks was over. Should have put half into Goldman Sacks half into JP Morgan. The Fed wasn't going to let Goldman Sacks and JP Morgan fail.
- caf 10y ago
  "Not letting them fail" does not necessarily mean that investors in those institutions won't be taking a bath.
  - CamperBob2 10y ago
    Exactly. After learning from his mistake with Chrysler, Gibbon1's dad might have bought GM's bonds, and gotten hosed yet again. Oops.
    - Gibbon1 10y ago
      Chrysler was 1979, GM was 2008 totally different political economic climate. In 1979 ordinary businesses and unions had a huge amount of political clout. And Chrysler wasn't an ordinary business. By 2008 only Wall Street investment banks had that clout. That's because under neo-liberalism the profits from the real economy are funneled through the investment house. Letting them go under means the spigot gets turned off.
- shostack 10y ago
  Putting all your eggs into a single risky basket is not a good thing. Sounds like your dad was wise despite wishing he had done otherwise with the benefit of hindsight.

Gibbon1 10y ago

You learned half the lesson. The other half is the over-class will force the government to do whatever is needed to keep them from going bust. My dad claimed that the biggest mistake he made financially was when Chrysler was going bankrupt in in the early eighties. He knew that it was politically impossible for the government to let Chrysler fail. However my dad didn't follow through and sock the 100k he had into Chrysler stock. I did the same thing. I knew in January 2009 that the slide in financial stocks was over. Should have put half into Goldman Sacks half into JP Morgan. The Fed wasn't going to let Goldman Sacks and JP Morgan fail.

caf 10y ago
"Not letting them fail" does not necessarily mean that investors in those institutions won't be taking a bath.
- CamperBob2 10y ago
  Exactly. After learning from his mistake with Chrysler, Gibbon1's dad might have bought GM's bonds, and gotten hosed yet again. Oops.
  - Gibbon1 10y ago
    Chrysler was 1979, GM was 2008 totally different political economic climate. In 1979 ordinary businesses and unions had a huge amount of political clout. And Chrysler wasn't an ordinary business. By 2008 only Wall Street investment banks had that clout. That's because under neo-liberalism the profits from the real economy are funneled through the investment house. Letting them go under means the spigot gets turned off.
shostack 10y ago
Putting all your eggs into a single risky basket is not a good thing. Sounds like your dad was wise despite wishing he had done otherwise with the benefit of hindsight.