Did Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, Bear Stearns, JP Morgan Chase, Bank of America, Citibank, Wells Fargo, Deutsche Bank, Sun Trust, Barclays, AIG, Moody's, Fitch, Warren Buffett, the Fed, or any analyst on Wall Street, predict the 2008 housing and financial crisis?
If the answer is no, why do ordinary retail investors put so much faith in their predictions?
I thought Goldman Sachs got in trouble because they package these bad mortgages and sold them and then shorted the housing stocks and then bought insurance from AIG and made a bunch of money on theses moves so I would think they new exactly what was going on . and I don't think any body went to jail funny how things work .I could be wrong but I don't think I am .
John Paulson used Credit Default Swaps (CDOs) to bet against bonds backed by subprime mortgages. He asked Goldman Sachs to bundle sour or about to go sour subprime mortgages for this purpose. Goldman sold the same packaged mortgages to long investors and sovereign funds. In essence, Paulson took the short side; others took the long side. Paulson made about $4 billion. Other investors, including Lehman Brothers and AIG lost big. I do not believe that Goldman predicted the 2008 meltdown.
They actually used their predictions to trap the retail investor. I felt the housing downturn coming and liquidated my spec homes ahead of it. However, I missed on the length of time it lasted. The same as I have missed the length of time CLF is taking to recover. But just like housing, CLF will recover as worldwide economic growth is a reality.
A pregnant gal I knew actually had a dream in the mid 2000s that I interpreted as an indicator of the housing bust...a house is ultimately a human nest so her being close to laying an "egg" made a lot of sense. She had a dream that there was a house up on stilts high in the sky, like a tree house, only there were termites eating the wooden supports. True story, dream was instrumental in me not investing in real estate and instead bought gold...was a good decision.