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Source link: http://archive.mises.org/12513/short-the-delusion/

Short the Delusion

April 20, 2010 by

To be proved right in the end is never as sweet as one imagines. The recognition goes to those who curry favor with the media through publicists and charm while reconstructing history to suit their purposes. FULL ARTICLE by Doug French

{ 5 comments }

HL April 20, 2010 at 2:48 pm

Allow me to confirm this book is a great read. As with all of his books, Lewis manages to weave a gripping tale of derring-do by otherwise ordinary guys who, at first, had no reason to doubt the prevailing “wisdom.” But, like so many of our heroes at LvMI, these guys followed the evidence to the inevitable conclusion that the prevailing wisdom was wrong. And, like so many of our heroes at LvMI, they put their hearts and souls (and, yes, tons of cash) into staking a position against the crowd.

You will not be able to put this book down. As an Austrian (or one familiar with the Austrian School) you will be laughing out loud again and again. I sure as heck did. (As a side note, Lewis unintentionally makes fun of himself when he tepidly recommends more “oversight” of this market – as if the guys and gals at the SEC are so much brighter and possessed of greater wisdom than the guys and gals and Moody’s, et al. Ha. Lewis forgets he once thought these mortgage-backed bonds were hot stuff.)

Jared April 20, 2010 at 5:24 pm

I am a big sports fan and I love Michael Lewis, The Blind Side and Money Ball were great reads, but I haven’t read anything else by him. I was almost sure he was a Keynesian when he claimed Keynes’ “The General Theory of Employment, Interest, and Money” to be one of the 6 economic classics of all time in his 1,500 page book… anyone else think this?

Ohhh Henry April 20, 2010 at 6:05 pm

Dear Mr. Lewis,

Thank you for sharing the detailed formula in which you find delusional investments and then make money by shorting them. While we appreciate the value of this approach, we have previously determined that it is far more remunerative for us to pump unsound investments to our clients while these securities are on their way up, short them at the last moment before they crash, and then request half-trillion dollar bailouts to cover any incidental losses and to, um, ensure the stability of the system.

Regards,
Wall Street

maverick muse April 21, 2010 at 8:39 am

“It’s never paid to bet against America,” according to Warren Buffett. But a quirky group of investors did just that and made millions, betting against what is more American than apple pie and baseball — the idea that housing prices always go up.

QUIRKY? Too polite because it wasn’t simply betting against housing prices always going up that they did. Anyone with experience knows that the housing market has its ups and downs, so prices can’t always go up during the downs.

SWASHBUCKLERS! Yes, identify exactly what this sinister group of investors did beyond all reason except absolute corruption. By deception, they failed to identify the failure they were selling–passing that failure buck on to stick on gullible trusting profiteers, building the embedded economic crash. THAT failure they were selling had never before been sold LEGALLY. It isn’t as if it has hurt the corrupt sellers to sell fraud. Indeed, they have made off like PIRATES.

This problematic currency coin is that government is empowering organized crime to own all and seducing the population into stupidity-serfdom with pie in the sky gimmicks as cheap as any trinket.

Moody’s et al. knew exactly what was going on but were themselves in on the profiteering off the books. Everyone who claims to not have known is lying that they didn’t know something stank rotten. Production profits don’t just appear out of nothing. Only fraud will produce such profits for the initial seller at the top of the pyramid scheme. As per government officials claiming ignorance as bliss, since it was their job to know, there is no excuse ESPECIALLY after being challenged to produce answers.

They denied their approaching tsunami because they did not want to be involved in their own job description responsibility to announce the known danger of rotten profiteering from plunder, excusing themselves because in advance they could not explicate the tsunami’s exact components and precise impact as to whom would be killed and what would be destroyed and what might happen to be spared by chance.

This book is worth buying, not simply to read but to make the public statement that taxpayers will not buy bankruptcy even from authoritarian government. Been there, done that, never again no matter the rationale propaganda. PEACEFUL CIVIL DISOBEDIENCE — through participation, promote the free market, the pursuit of happiness and the US CONSTITUTION.

maverick muse April 21, 2010 at 8:42 am

By the way, glad to see the Mises site up today.

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