Personal Finance and Investing

a situation where house prices on a national average went down, and the mortgage-backed securities (Google: collateralized debt obligations) were diversified geographically, and so they were safe investments, and there was no need to worry our pretty little heads off about the frothy housing prices and all the stories about people being way over their heads on adjustable rate mortgages.

The conventional wisdom and the financial pundits were virtually all blathering this shit in unison. And message board pundits trying to sound smart and "in the know" and "who understand the markets" and declaring that people were on a "fools errand" to react to bad news by selling these safe and wonderfully financially engineered diversified wonders were blathering the conventional wisdom, despite ever-growing stories of people defaulting on their mortgages. Sure this might be a problem in a few local markets, they "wisely" bleeted, but generally, people who got in trouble with their mortgages could just sell their houses and pay their mortgages off as prices keep rising on a national average basis as they always have, and therefore, obviously, of course, they always will.

Watch out when what you are told is basically a variant of:

If it has never happened before, it never will.

If it hasn't happened in 90 years, it never will because we're smarter now and have a wonderful Fed and computers and blah blah.

If it happened in some other country, even a highly developed country like Japan, it can't happen here, because, well we're different (and smarter of course U.S.A. U.S.A. U.S.A)