Originally Posted by
livedarklions
Yes, so using the housing bubble as an example where people had gotten burned by abandoning conventional wisdom was therefore pretty weird. Outside of the word "bubble", the dot com bubble and the housing bubble were really opposite sides of the coin. Dotcom was betting too hard on intangible "magic" innovations, the housing bubble was too many people chasing the same very tangible assets, and lenders wildly overestimating the value of the tangible security.
Dotcom and housing were both 'get-rich-quick" schemes. Dotcom was based on magical thinking---"I am sure whatever some 24-year-old nerd is telling me will be the next Apple will be!" and of course it was all vaporware and salesmanship, with few actual products and usually no actual profits.
Housing had nothing to do with real estate, sort of. it was more about cynical investors realizing the could create fictional investment instruments and sell them to suckers The Dotcom whiz kids really believed (I think, and sometimes at least) that they had some phenomenal new virtual product. The housing bubble crooks flat knew they were cheating everybody and gaming the system. Even the regulators and ratings firms got in on it---shows why we needed the regulations we got rid of because .... oh, yeah All regulations are evil and hurt business.
The "housing bubble" was really the "collateralized debt obligations" bubble .... and as with all bubbles, CDOs were great investments until people saw the emperor was naked.
And have we forgotten the Junk-Bond/Savings-and-Loan debacle? or are you all too young/?
Some folks might point out that none of this has anything to do with buying toys and games on credit. Some folks might point out that when some folks feel the need to win an internet debate, they will voluntarily make all kinds of totally wrong statements ( having been there myself too often, and seem some other posters there .... we All know it, but usually too late in any given thread.)
Anyway ... I take my comedy wherever I find it.