It was a remarkable failure of the economics profession and economics reporters not to see the housing bubble before it burst. It is truly incredible that so many can't see it even after the fact.
Yes, it is strange but true. The WSJ has a discussion of the future of Fannie Mae and Freddie Mac and there is no mention whatsoever of their failure to see the housing bubble in discussing the causes of their collapse. If anyone at these institutions had been smarter than Barney Frank's dining room table, they would not have been buying and guaranteeing mortgages used to purchase homes at bubble-inflated prices. This simple act is what doomed these companies. But the WSJ and its "experts" can't even discuss it.
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