Here is an excellent article from the Pragmatic Capitalist. http://pragcap.com/why-did-so-many-i...-credit-crisis
A few of us here banged on about it ad nauseam and suffered ridicule etc, but it was only a matter of time. It also gives Keynesianism a bloody good spray. Our governments pseudo Keynesian response to this mess will cost us very dearly in the future.
So why did so many miss the signs?
I think about it every day: “Why did so many investors have to be hurt by the financial crisis of 2008″? In hindsight, it seems like the crisis was so obvious. The now infamous credit market debt to GDP chart, the parabolic Case/Shiller housing chart, the 40:1 leverage ratios, the subprime problems, etc.. Weren’t they telltale signs that something was profoundly wrong with the economy? It would seem so, but for some reason we can count the “experts” who actually predicted the crisis on two hands. And many are even skeptical of this small sampling of prescient economists and analysts. Statistically speaking you could easily make the argument that most of these “experts” who got it right were anomalies or lucky. So why were so few investors prepared for the declines in the markets? I chalk it up to multiple flaws in the way investors have been taught to approach the investment landscape......................etc etc