We just got lucky

From Bloomberg:

Greenspan Should Have Seen Housing Crisis, Burry Says

Former Federal Reserve Chairman Alan Greenspan should have foreseen the collapse of the U.S. housing market and warned the public, one of the most prominent bettors against the subprime market wrote in a New York Times commentary yesterday.

“He should have seen what was coming and offered a sober, apolitical warning,” Michael Burry, who was head of Scion Capital LLC, wrote in the Times. “Everyone would have listened; when he talked about the economy, the world hung on every single word.”

“Unfortunately, he did not give good advice,” Burry said. In 2005, “Mr. Greenspan trumpeted the expansion of the subprime mortgage market” at a time when “the tide was about to turn,” Burry wrote.

“The signs were all there in 2005, when a bursting of the bubble would have had far less dire consequences and when the government could have acted to minimize the fallout,” Burry said in his commentary.

Burry, who was among the first to bet on subprime mortgage defaults, said Greenspan and other Fed officials have never asked how he came to his conclusions about the market.

“Mr. Greenspan should use his substantial intellect and unsurpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat,” Burry wrote.

Burry said Greenspan has dismissed those who saw the coming crisis as people who just got lucky.

This entry was posted in Economics, Foreclosures, Housing Bubble, National Real Estate. Bookmark the permalink.

100 Responses to We just got lucky

  1. Poltroon says:

    I’m just hoping this guy in FL grows the set he appeared to have and burns the friggin’ books tomorrow.

  2. Poltroon says:

    We need a focus for our hatred.

  3. grim says:

    From CNN/Money:

    Homebuyer tax credit: 950,000 must repay

    Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.

    According to a report from the Inspector General for Tax Administration, released to the public Thursday, about 950,000 of the nearly 1.8 million Americans who claimed the tax credit on their 2009 tax returns will have to return the money.

    The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.

    Those who bought properties during 2008 were to deduct, dollar for dollar, up to 10% of the home’s purchase price or $7,500, whichever was less. The catch: The money was a no-interest loan that had to be repaid within 15 years.

    Had they waited to buy until 2009, they could have gotten a much sweeter deal. Congress extended the credit and made it a refund rather than a loan.

    Now, the IRS is developing a strategy for separating the 2009 taxpayers who are required to repay the credit from those who are not.

  4. grim says:

    From CNBC:

    Tighter Lending Rules Needed: FDIC’s Bair

    Regulators should tighten lending rules for home mortgages in the US and the government is taking on a lot of risk by guaranteeing risky loans, Federal Deposit Insurance Corporation Chairman Shelia Bair warned.

    “I think we should all be concerned about the type of exposure that the government is taking on through guaranteeing so many mortgages right now, and make sure that we do have some prudent underwriting standards, and especially documented ability to repay,” Bair told CNBC Wednesday.

    Bair called for a new set of “common sense” rules that would apply to both bank and nonbank mortgage sellers, ensuring the borrower has the capacity to repay a mortgage and makes a larger down payment than is currently required.

    “Clearly there is a strong correlation between the amount of skin in the game a borrower puts in up front and how that loan performs,” she said. “And it’s only common sense. Do you put 20 percent down? You’re committed to that house. You walk away from that house, you’re going to lose a lot of the money that you put in up front.”

  5. Mikeinwaiting says:

    grim 4 but that is not FAIR! Congress should get to work on making the earlier credit a giveaway also. This is America after all.

  6. Mikeinwaiting says:

    grim 5 never happen . Housing would tank like a rock, oh wait it already did that. The sh*t would really hit the fan.

  7. gary says:

    Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.

    Chains you can believe in.

  8. gary says:

    I’m off to work now… must support the prisons and workhouses and to ensure the Treadmill and the Poor Law are in full vigor.

  9. Simply Ravishing HEHEHE says:


  10. Simply Ravishing HEHEHE says:

    Listening to Gerald Celente – this country has become Snooki-stupid.

  11. Mr Wantanapolous says:

    “Burry said Greenspan has dismissed those who saw the coming crisis as people who just got lucky.”

    Luck is the residue of design. [Branch Rickey]

    It pays to be a live chicken rather than a dead duck.

  12. jp says:

    when’re the buying levels for SRS?

  13. yo'me says:

    David Brooks Tells Us to Just Sit Back and Accept Double-Digit Unemployment
    Friday, 10 September 2010 03:53
    In another fascinating piece of creative economics David Brooks tells us: “we can get distracted by short-term stimulus debates, but those are irrelevant by now.” Okay folks, just get used to 9.6 percent unemployment, Mr. Brooks says that there is nothing can be done.

    The column is chock full of observations that most people did not know, probably because they are not true. For example, Brooks tells us that if more people follow the recommendation of Michelle Obama and go into teaching and service occupations then it will make the country poorer.

    That’s an interesting thought. Would the country be worse off if most teachers came from the top quartile in their classes rather than further down the ladder? I certainly did not know this.

    As for other service occupations, the country certainly could have used more competent and honest economists. We are losing more than $1.4 trillion a year (@$19,000 for a family of four) due to the recession caused by the collapse of the housing bubble. If we had more competent economists, then the bubble never would have been allowed to grow to such dangerous levels. We can call this $19,000 in lost output a year the “incompetent economist tax.” (By way of comparison, toward the middle of next year the incompetent economist tax will exceed the size of the 75-year projected shortfall in the Social Security trust fund.)

    Competent economists could make us richer in other ways. For example, we spend close to $300 billion a year on prescription drugs. These drugs would cost roughly one-tenth as much if patent monopolies did not allow drug companies to sell their drugs at prices far above their competitive market price. Competent economists could develop more efficient mechanisms for financing prescription drug research, thereby saving us hundreds of billions of dollars a year.

    Even Mr. Brooks’ key concern, a lack of people going into engineering, could be addressed in large part of a bit of competent economics. Manufacturing in the United States is at an enormous competitive disadvantage because of the over-valued dollar. If the dollar is 30 percent over-valued, then it means that we are effectively providing a subsidy of 30 percent for imports and imposing a tariff of 30 percent on exports. As people who understand economics know, the over-valued dollar is the main reason that we have a trade deficit.

    If we got the dollar down, then our manufacturing industry would be much more competitive. This would make careers in engineering more attractive relative to the alternatives. Then we would have more people entering engineering and David Brooks would be happy

    Dean Baker

  14. Essex says:

    Greenspan really needs to redeem himself.

    Perhaps a sex tape? That seems to be the answer here in the USA.


  15. Mr Wantanapolous says:

    “Mr. Greenspan should use his substantial intellect and unsurpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat,” Burry wrote.

    AG did not miss the boat. He was the captain of the Titanic. He believed that the Fed did not have to pay attention to asset prices since they had the tools/bazookas to clean up the mess after the inferno. Great job Alan; 25 million are unemployed/under-employed, the foundation of today’s economy is a combination of fradulent accounting, lies, social engineering and a paper carry trade that will eventually become the most significant bust in our history. The bazooka has spent close to $4T, with approx $12T guaranteed. The result; 3 years later we are still pissing in the wind.

    Let’s utilize 50.5’s bulldozer and bring down the private banking cartel. It will be called a start.

    “Federal Reserve Chairman Alan Greenspan said Monday that Americans’ preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.”

    “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,” Greenspan said.


  16. Poltroon says:

    jp (13)-

    Why buy SRS, when you can have DRV?

  17. Poltroon says:

    BC (16)-

    You’d think AG was the one with Asperger’s.

  18. Poltroon says:

    Austin Goolsbee the next in line to ruin his career.

    Looks like now, all Bojangles has to pick from are guys who are already acknowledged assclowns.

  19. Mr Wantanapolous says:

    “Okay folks, just get used to 9.6 percent unemployment, Mr. Brooks says that there is nothing can be done.”


    You can print, drop rates to zero, triple your balance sheet, buy long dated treasuries, etc, etc… Unfortunately, you can’t force banks to lend and you can’t force consumers to borrow. Banks are earning a record spread by borrowing from the fed at zero. Why lend to the walking zombies? The walking zombies have been crushed by falling asset prices. Yet, the underlying debt remains. They now realize their only hope is to start saving and writing down loans. Wonder when John Q will have the ability to mark his crap to a model?

    3 years later and I’m asking the same question; Got Demand?

  20. Simply Ravishing HEHEHE says:

    “Perhaps a sex tape? That seems to be the answer here in the USA.”


  21. Mr Wantanapolous says:

    Doom [18],

    Funny, how one changes their perspective when they are now paid to tell the truth;


  22. Poltroon says:

    HE (21)-

    I’d pay good coin to see that go down in AG’s bathtub.

    I’d pay even more to see that in the form of a snuff flick with the ending being AG slipping beneath the waterline.

  23. All "H-Train" Hype says:

    Poltroon (19):

    If memory served me right, wasn’t Goolsbee pushed aside after Obama won the election and brought in that idiot Larry Summers. Is Goolsbee that much of a hump to allow himself to be pushed aside and then brought as a total second-string lackie? Man what a wuss that guy is.

    And to all my Jewish friends a belated happy new year.

  24. Poltroon says:

    hype (24)-

    Goolsbee is the economic equivalent of a 10th Av. tranny trick.

  25. Poltroon says:

    Summers will make him his byatch.

  26. Satara says:

    Although Japan’s economy is always invoked as the worst-case scenario following a financial collapse, there’s really a lot to be said for the place.

    Namely, nearly full employment, gleaming infrastructure, and impressive social services.

    Meanwhile, Krugman argues, if the Republicans sweep to power in November, and John Boehner follows through on the economic plan he supports (tax cuts for the rich and spending cuts for the government), things will get so bad in this country that we will soon gaze longingly at Japan:

    … we’ll be lucky to do as well as Japan did at limiting the human and economic cost of the economy’s financial woes. But it’s by no means certain that we’ll do even that much. If the Republicans go beyond obstruction to actually setting policy — which they might if they win big in November — we’ll be on our way to economic performance that makes Japan look like the promised land.

    It’s hard to overstate how destructive the economic ideas offered earlier this week by John Boehner, the House minority leader, would be if put into practice. Basically, he proposes two things: large tax cuts for the wealthy that would increase the budget deficit while doing little to support the economy, and sharp spending cuts that would depress the economy while doing little to improve budget prospects. Fewer jobs and bigger deficits — the perfect combination…

  27. Mr Wantanapolous says:

    “Although Japan’s economy is always invoked as the worst-case scenario following a financial collapse, there’s really a lot to be said for the place.”

    Do yourself a favor, have a conversation with Aiko Wantanabe. Ask her how many more years remaining on her 100 year mortgage.

  28. dim says:

    4 – what about those 582 children under 18 who claimed those homebuyer’s credits? They ought to just cancel the whole damn thing as a case study in poor design and execution of public policy.

  29. njgal says:

    I went to see one of those new “luxury” condos three or four months ago with a broker. We went to the sales office and they took my name. Now, if I buy a condo from that place, do they need to pay a commission to the broker? Is there some time limit after the commission is not applicable anymore?

    I was hoping to lowball them, one argument being that they don’t have to pay any commission..

    I guess it was stupid to go there with a broker.

  30. Unexpected HEHEHE says:

    “Namely, nearly full employment, gleaming infrastructure, and impressive social services.”

    Japan=20 year Ponzi scheme that is coming to the end of the road due to demographics. You want to see a slow motion snuff film watch what happens to that country in the next 10-20 years.

  31. chicagofinance says:

    Goolsbee is cool. He just got used….that’s all….

    Poltroon says:
    September 10, 2010 at 8:50 am
    hype (24)-
    Goolsbee is the economic equivalent of a 10th Av. tranny trick.

  32. Juice Box says:

    re: We got lucky..

    Dementia perhaps? Here is a famous quote of his….

    “Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004

  33. Poltroon says:

    Nothing like your two decades of horrible economy crashing into the wall of declining birth rates.

  34. Poltroon says:

    chi (32)-

    He got used, alright. And, like the sponge for abuse that he is, he came back for more.

  35. Juice Box says:

    re #34 – Which has spawned two generations that are now totally dropping out of the program, the grass-eaters they are called.

    “More than 80 per cent of 35-year-olds in Japan live on an annual income of two million yen – a key poverty benchmark.”


  36. Yo'me says:

    2000000 JAPANESE YEN (JPY) = 23826.5428 US DOLLAR (USD)

    45% were classified as poor,did not have to pay Federal tax.We are not o far away.Add the seniors that makes alot less that that.

    “More than 80 per cent of 35-year-olds in Japan live on an annual income of two million yen – a key poverty benchmark.”

  37. jamil says:

    “Japan=20 year Ponzi scheme that is coming to the end of the road due to demographics”

    Yesterday I saw a news that 200 centenarians were “missing” in Japan. It seems that old people never die officially in Japan, at least as long as the welfare benefits keep rolling. A bit similar to voter rolls in dem-controlled areas where people born in 1825 were actively voting in 2008.

  38. Mr Wantanapolous says:

    Juice [33],

    How about the evolution of derivatives and the ability to disperse risk? In addition to this, the explosion of credit default swaps offering external information to a bank’s risk management dept.

    They did such fantastic job that we now rely on mark to fantasy prices. Systemic collapse is teetering on a foundation of fraudulent accounting. How’s that for dispersing risk?

  39. Unexpected HEHEHE says:

    The Big O has an economic press conference today? Tell me lies, tell me sweet little lies.

  40. Painhrtz says:

    Greenspan and rest of the so-called economists should be fed to the wood chipper, alive. Hanging is too good and quick for those crimimals

  41. Libtard and the City says:


    Take the needle off the record already. It keeps skipping.

  42. Poltroon says:

    pain (41)-

    Primer on feeding people into a wood chipper:


  43. Poltroon says:

    Stu (42)-

    Would it be unseemly to put a bounty on Jamil’s head?

  44. Libtard and the City says:

    Yes, it would seemingly appear unseemly to put a bounty on Jamil’s head.

  45. Juice Box says:

    re: #39 – Wantanapolous

    If he really followed Ayn Rand’s teachings and the “scientific socialism” he so espoused he would have been aware of the “irrational exuberance” of derivatives and the ensuing fraud that would occur without regulation, yet he still maintained the stance of the free market cheerleader to Congress for the Financial Sector. A real “Team Player” for sure after all you don’t want the be off the invite list inside the Beltway, or like former Secretary Paul O’Neill you might have someone like Dick Cheney show you the door.

  46. Painhrtz says:

    Pol problem was she was already dead,

  47. Mr Wantanapolous says:


    Just another puppet.

  48. Juice Box says:

    re: #40 – Talking about the economy? Hahaha. Unless the Big O starts boinking an Intern or Snookie his ratings are going to go lower than Jimmy Carter’s during his last two years in office.

  49. Painhrtz says:

    Top 2 reasons not to escrow your taxes and homeowners policy for a lower mortgage rate.

    1. Getting overdue tax notices from the town.

    2. Having your homeowners insurance cancelled

    Loan service centers are filled with idiots.

  50. BergenBagHolder says:

    A question for the lawyers/brokers. I recently closed on a refinancing. Shortly afterwards I started getting letters from Fifth Third saying I need to make changes to my homeowners policy, because ‘their investors require it’ or some such nonsense. The changes seem minor, but I would like to tell them to pound salt. Do they have any right to ask this? Shoudn’t they have brought this up before closing? If they dont like the terms of our agreement, then why cant I ask them for a principal reduction too!

    I am hesitant to respond because that might make me lose my right to say ‘no’. In fact, I want to just send them my first mortage payment, then if they cash it wouldnt they lose any legal standing to request this? Any words of wisdom would be appreciated.

    Thanks in advance.

  51. reinvestor101 says:

    “Let’s utilize 50.5′s bulldozer and bring down the private banking cartel. It will be called a start.”

    WTF? This IS NOT what my damn bulldozer should be used for. Greenspan was a damn genius and the mastermind behind the damn boom before being undermined by the damn real estate terrorists and socialists that run this damn country and want to take away our damn freedom. Guess what? Some of us know what the damn problem is and we’re not afraid to take our damn government back. Fortunately, we have someone with a damn set that speaks for the damn people and is waking folks up. Don’t believe me? Here, take a look at what the people think the damn problem is:


    God, if wasn’t for Glenn Beck, Sarah and Fox news, I’d be totally lost on what the real damn issues are. No one said a damn thing about Greenspan being a damn problem. The damn liberals who put together this video are unwittingly helping the real patriots in this damn country get the word out.

    BC Bob, you’re clueless as to what the real issues are.

  52. Mr Wantanapolous says:

    “BC Bob, you’re clueless as to what the real issues are.”


    Many told him the same in 2003 when he starting dumping greenbacks for shiny. Guess what they called him in 2005, when he was swamped by bidders and kicked out his 4 walls and a roof to a termite, also named 50.5?

  53. Doyle says:

    Clot-Grim or anyone who has experienced this… If you are buying a home and selling with the same realtor, is it normal for them to give you a break on the customary commission when selling your home? Do you guys ever discount since you will be making $ on both transactions?

  54. seif says:

    #53 Thanks for the vid. that was totally entrancing. Not sure if your post was supposed to be comical, but it was for me. I struggled to find one interviewee in that video who actually had a concrete fact or a clue what they are really doing there. Great stuff.

  55. hughesrep says:


    Mine discounted a point last year. She should have just bought me a bucket.

  56. hughesrep says:


    Should be half of a point.

  57. Poltroon says:

    gator (54)-

    Montclair can even give a nod to its love of the multicultural and start calling itself a favela after they put this idiot idea to work.

  58. Poltroon says:

    doyle (56)-

    Only if I like you and you don’t give me a hard time.

  59. Confused In NJ says:

    War should be over soon, Obama says there is only a handfull of bad actors, among the billions.

  60. NJGator says:

    Poltroon 60 – On the Yahoo Watercooler message board there’s also a contingent of local residents that feel we can be daved by implementing “Pay as You Throw” garbage collection.

  61. skep-tic says:

    guess who else was way wrong (even as far as 2Q2007!)? Mr. O’s new chief economic advisor. Check out his endorsement of subprime in the NYT from March 2007:


  62. All "H-Train" Hype says:

    Here is a funny article from the late, great Tanta regarding the new economic parrott…


  63. Poltroon says:

    One cannot be part of the gubmint’s economic inner sanctum without being a brain-dead, Keynesian monetarist. They are the equivalent of the Joker’s idiot accomplices in bank robbery…the theory being: intelligent people get in the way of the crime, ask too many questions and muck things up.

  64. Juice Box says:

    Goolsbee got the job because he cannot be vetted by the Senate and he was voted The Funniest Celebrity in Washington in 2009.

    We now have a Stand-up comedian trying to shape economic policy.


  65. Doyle says:

    Hughes-Clot, thanks, it sounds like a normal occurrence then.

  66. Poltroon says:

    juice (67)-

    You can draw a parallel between anything in modern US economics and Weekend at Bernie’s, too.

  67. Sas3 says:

    Liz Warren likely to become the head of the Consumer Protection Agency. Seems like O is showing some signs of confidence. A few more appointments like that and the GOP donors can “take a break from US” and retire to Dubai.

  68. Poltroon says:

    Nah. The US consumer has been gang-r@ped repeatedly and tossed to the side of the road. There is nothing left to “protect”.

    More likely, TPTB see this as a way to marginalize Warren and placate her constituency…while the daylight bank robbery continues.

  69. njgal says:

    anybody know if the broker is entitled to the commission if her client bought condo directly through the building’s sales office 4-5 months later (she brought the client to the sales office originally) ?

  70. Comrade Nom Deplume aux maison says:


    You have mail

  71. skep-tic says:


    what does your broker’s agreement say? is there an expiration date re representation?

  72. Comrade Nom Deplume aux maison says:

    Feds have STILL NOT published the quarterly expatriate number. This is very unusual, and I wonder why they are sitting on this. This report was supposed to be released by the end of July.

    BTW, I just learned another interesting expatriate fact. Used to be that renunciation was free. Now, not only is there a huge backlog at major embassies (over a year in London), the USG now charges a $450 fee for the privilege of renouncing citizenship.

  73. njgal says:

    75, there isn’t any broker’s agreement. I merely met a broker at open house and went with here the next day to look at condos and ended up in a few “luxury” buildings with their own sales offices. The sales office took my name and the broker’s name. I’m not sure if the sales office needs to pay the broker a commission or something.

  74. skep-tic says:

    Then I would say your broker is out of luck.

  75. Painhrtz says:

    Nom thanks owe you a box of rounds of your choice

  76. All "H-Train" Hype says:

    Love the pump today. Most revered and glorious Premier Obamachev goes on TV to say all is well and alas the market responds with positive results.

  77. Comrade Nom Deplume aux maison says:

    [78] pain

    Got enough ammo. The “rounds” of choice I have in mind are single malt.

  78. Barbara says:

    54. gator
    Re: Granny Flats. Enjoy the influx of illegals. They are the only ones who will put up with sub par basement apartments as I’m sure these grannies aren’t going to sink 20k into renovations. Word travels fast!

  79. gary says:

    They’re doing their client a serious injustice. Why in the world would a listing agent get the hopes up for a seller who obviously is having difficulty with their internal coping mechanism? Is it not the objective for anyone that sells anything to push the product out the door? Doesn’t it make sense to push as much volume as possible and to not swing for the fences on every pitch? Is the listing agent mired in the 2nd stage of the Kübler-Ross grief cycle? What potential buyer would fall for this f*cking ambush?


  80. Poltroon says:

    By going along with the gubmint and banksters’ charade of a Ponzi, the RE industry is sealing its own doom. We should be the ones pounding the table for mark-to-market and price discovery…but we lay down in front of our enemies and invite them to trample us underfoot.

    Worst of all, by doing so, we have become not only their accomplices, but also their lackeys.

  81. Painhrtz says:

    12 or 15 year?

  82. Al Gore says:

    Blah Blah Blah. Same mother f_cking sh_t different day. Wake up in the morning and be grateful because what we have coming will make these days look like a walk in the park. Burn your religous books to incite hate if thats what makes you feel better. Start f_ckin WW3 if need be. In the end you will be defending yourself. God help the disarmed government dependent p_ssies.

  83. House Hunter says:

    #75 Nom…ran into someone tonight with a plan, not a common place conversation, interesting that is came up. They are looking for dual citizenship in Canada (his dad is from there) and Cayman…just wants to go there

  84. Essex says:

    Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny.
    Thomas Jefferson

  85. Essex says:

    Christie just signed some amazing legislation for the kids. People can now attend schools in other towns up to 20 miles away!! I wonder what that will do to the real estate market. No longer will you have to attend the crappy school in your neighborhood if it is indeed crappy. Now you can travel to a good school, and those are like gold, in other towns. This is getting good!

  86. Mikeinwaiting says:

    Essex 90 link?

  87. stan says:

    Hard to believe its been 9 years.

  88. Juice Box says:

    Was at the Jamiroquai Concert on 9/10 Sunday night the night before in the city, hooked up with a cute chick and did not make it home till 5AM. Did not make it to work that day dunno what would have happened if I did not meet that cute chick who’s name now escapes me. It has been a long time for me, but for others closer to the action it still seems like yesterday. We Need to move on as a country, finish the rebuilding of ground zero end the wars, rebuild our economy and return to the greatness that we are now just a shadow of.

  89. speedy says:

    I was actually surprised to see Springsteen at the gym this morning he usually shown up at 9 am but I thought he would be at ground zero …..guess he really dislikes Christie

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  93. I think the Greenspan taken the good step by dismissing those who saw the coming crisis as people who just got lucky.

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