When a large number of normally-rational people make the same stupid mistake at the same time (which is the direct cause of investment bubbles), look into why it did not seem stupid. Most likely they were responding to incorrect information - that either a) came from a very highly credible source so they believed it, or (b) had the weight of law behind it, so those who didn't believe it would be punished for acting accordingly and/or rewarded for acting contrary to their beliefs. Or (c) a combination of the above.No warrl, that is wrong.Explain to me please, why:1. Commercial real estate was in a bubble just as residential real estate2. There was a SYNCHRONOUS worldwide real estate bubble in many/most industrialized countries3. Why is there not a SINGLE INSTANCE, NOT ONE where a banker complained about being forced by the government to lend to people he didn't want to?Why, instead where the bankers instead in Washington lobbying for the removal of what restrictions remained on their leverage/insane lending practices?Your view of this issue doesn't make any sense, and if you truly tried to apply your model to what actually happend, you would see that.
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