Comment by RandomLensman
1 month ago
What do you mean by "take down Bear Stearns"?
Btw., projections are just that - projections and I am not sure Acemoglu proved things mathematical (as in a mathematical proof) but rather within the context of a model/assumptions.
That financial markets/innovation can outpace the actual innovation is also not some new insight, but that alone doesn't necessarily make for a useful prediction.
Bear Stearns was the first bank to collapse in the 2007-2008 subprime mortgage crisis, also known as the housing bubble.
That bubble was also manufactured by reckless financial engineers.
And those who warned early were ridiculed:
https://markets.businessinsider.com/news/stocks/who-is-nouri...
"When he spoke of an impending housing crash at the International Monetary Fund that year, the audience chuckled, the New York Times reported."
'"He sounded like a madman in 2006," IMF economist Prakash Loungani told the Times, after inviting Roubini to the IMF conference that year. "He was a prophet when he returned in 2007."'
I am fully aware of the GFC, but not sure what "take down" should mean there in relation to Bear.
Not everyone who spoke about house price risk was ridiculed, btw.
Catchy and ironic phrasing of "the financial fraudsters ruining Bear Stearns".
It seems unambiguous in this context.
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