risks-were-ignored-but-crisis-wasnt-unexpected

Risks were ignored, but crisis wasn't unexpected

SocGen's head of strategy refers to the current crisis as a predictable surprise that rewarded those who had invested in prescient collapse products.
Most people describe the happy days before the crisis as a bull market, but not James Montier. Societe Generale's plain-speaking global head of strategy calls it the dash to trash û a period when the madness of crowds led market participants to ignore risk in almost every way.

The collapse that followed this orgy was not an example of one of Nassim Taleb's black swans û a massive and unpredictable event û but a clearly predictable consequence of what was going on in the markets. Indeed, plenty of economists and market watchers did see it coming. Bob Shiller, for example, a Yale economist who prodded Alan Greenspan into making his irrational exuberance comment in 1996,...
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