What would you say was the trigger?
That was actually my favorite thing about The Big Short—the author did a good job of showing how the traders first to short the market earned the least and experienced the most distress.
That was actually my favorite thing about The Big Short—the author did a good job of showing how the traders first to short the market earned the least and experienced the most distress.
In the "syndrome theory" there is a crisis of the private sector creating problems faster that can solve them that then leads to a change in the governing philosophy that improves matters for a time, but then we run into the limits of that regime and it happens again.
This theory called the top in 1999 (I remember watching a football game on Christmas day and the ads were for stocks and bonds and not beer and I went home and sold)
In 2005 I thought the 2nd Iraq War would lead to a government crisis (analogous to Vietnam/Watergate) but that didn't happen.
Interestingly there was no real "regime change" after 1999 but instead SOX and other regulatory changes seemed to cement a culture of rent seeking and inpunity.
Milton Keynes, the great trader, said that "Markets can remain irrational longer than you can remain solvent" and that is quite true.