We were blindsided. We never saw it coming.
So said Goldman Sachs CEO Lloyd Blankfein of the financial crisis
of 2008. He likened its probability to four hurricanes hitting the East
Coast in a single season.
Blankfein was reminded by the chairman of the Financial Crisis
Inquiry Committee, Phil Angelides, that hurricanes are “acts of God.”
Financial crises are manmade. Yet Blankfein was backed up by Jamie
Dimon of JPMorgan, who said, “Somehow, we just missed … that home
prices don’t go up forever.”
The Wall Street titans thus conceded they did not foresee the
housing bubble ever bursting and they did not consider the possibility
of a collapse in value of the sub-prime mortgage securities piled up on
their books.
Backing up Blankfein’s plea of ignorance and incomprehension is
this: The crisis …
