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Comment by raverbashing | Hacker News Reader

> “Virtually no one, be they homeowners, financial institutions, rating agencies, regulators or investors, anticipated what is coming.” Nobody saw it coming

This is actually BS. SEVERAL people alerted to the housing bubble. There are currently a couple of Housing Bubbles going on around the world right now. They are being "responded to" with the same BS as in the US, that "this time it's different" or "prices never go down". Complete and utter BS

There were MANY warnings. The idea that a certain thing can/will always increase in value is so ridiculous yet so common.

How do you identify a housing bubble? Rent/Price ratio, variation in price per area (m2 or ft2) compared to inflation. Mortgage terms going up.

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> This is actually BS. SEVERAL people alerted to the housing bubble

You're correct, but they mostly went unheard. I remember around 2007 The Economist doing a special issue on the whole CDS thing (with a nice magazine cover and all), there were 32 pages of how great these new financial products were and about how they were "spreading risk" so that we'd have no big financial crisis to speak of in the near future.

Around the same time they also published a small, one-column article in the financial section about the house-price index which was strongly hinting (the article was) that all this was a in fact a bubble which might have nasty consequences. But people preferred to pay more attention to the nice cover and the 32 "in-depth" pages than to that small article, and that goes for most of the media and its followers.

>You're correct, but they mostly went unheard.

Even worse, it was heard constantly, but ridiculed. Every other mainstream article seemed to be "Why Hysterical Morons Seem to Think That We're In a Housing Bubble, and Why They Are Idiots Who Are Missing Out On a Great Chance to Flip a House!"

http://www.amazon.com/Real-Estate-Boom-Will-Bust/dp/03855143...

"There were MANY warnings".

This graph, showing the 25 year decline in mortgage rates has been the biggest clue. We've been priming the economic pump for 25 years, masking systemic flaws.

Biggest warning: http://mortgage-x.com/images/graph/fhfb_contract_rate.gif

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