I Saw the Crisis Coming. Why Didn’t the Fed?

Notably he did speak up about Fannie and Freddie in the early 2000s but was silenced by the GOP's drive to make war -- nobody wanted the economy cooled at all when gas prices were already creeping up.

So what's the man to do now? He could admit all that about the war and cast serious doubt on the Fed's independence and the US financial system, or he could insist that the boom/bust was a complete and total mystery.

In his last book he goes to great pains to marvel at seemingly impossible "risk adjusted rates of return" throughout a variety of markets, but concludes that in the case of housing it's still "froth" and not a bubble. Since the bubble hadn't become obvious at the time of the book's publication, what else would he say?

But more practically, we should all realize that if housing prices had dipped about 1-2% less than they did, most of the damage would not have occurred. Our institutions (banks, etc.) were calibrated to handle some amount of systemic risk, but not as much as it turned out they should have.

Hindsight is 20/20 and Burry may have been extra prescient, but like any bettor he could have been wrong. Since he had no additional information than the rest of the market, we can conclude that the rest were all sheep (or idiots) or that there was actually some -- gasp -- chance going on.

The difference is that the majority of people, institutions, etc., misjudged just how much calamity would be caused by price deviations that they calculated to be highly improbable.

That is complete bullshit. Try telling that to Paulson, who made billions on the crash. I saw the signs myself, but did not understand them, not believing that people like Greenspan would allow something so stupid to take place. When studies show that Americans trust their government less than ever, mark me down as a statistic.

When a bank official told me that "jobless, bankrupt, illegal immigrant, it doesn't matter," they can get somone a home loan, I should have known what that meant, and so should the Fed.

Greenspan should just shut up and accept his legacy.

2) You know what they say about broken clocks and being right. Someone who is always predicting a collapse will successfully predict any collapse.

That said, it is often worth paying attention to those who are a little bit outside the mainstream. That goes especially in economics, which is far from an exact science, and is full of political agendas.