4 ms·

"House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these pric

"House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals." -Ben Bernanke, circa 2005. I couldn't help myself. I really admire Sam and the current tech bubble(if there is one) is nothing like the credit crisis. Funds existed in 2008 whose sole investment strategy was to buy the opposing side of credit default swaps just so the bears had something to buy. Just wanted to poke fun :P

jpmattia 12y ago
Your example is actually quite good: Are there people who think they are better informed than the chairman of the Federal Reserve? And to amplify: This was Ben Bernanke's assessment as late as March 28, 2007 > At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. http://www.federalreserve.gov/newsevents/testimony/bernanke20070328a.htm http://www.federalreserve.gov/newsevents/testimony/bernanke2... Bear Sterns went to firesale less than a year later. To actually make money off of the market situation then (both on the long and short side), you had to also recognize the Keynesian wisdom: Markets can remain irrational longer than you can remain solvent. I don't begrudge Sam for talking his book, but pretending to have knowledge about what constitutes "bubble valuations" is tricky at best.