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by psaintla 3821 days ago
That's a pretty hilarious statement considering the lack of transparency is what led to our own market crash.
1 comments

That was lack of transparency inside privately generated mortgage backed securities. The US crash wasn't caused by blatant lies about economic indicator (GDP numbers, etc). The transparency of the housing sales is actually what allowed people to see the contractions and prevent the issue from getting even worse.
Transparency of housing sales isn't what allowed people to see the contractions and it certainly didn't keep the problem from getting worse. Massive numbers of defaults were the indicator. What kept the problem from getting worse was the government taking partial ownership of the major banks/AIG, increasing the FDIC limit and TARP.
With the tech bubble/bust you could look at underlying companies for the canary in the coal mine. With the housing bubble/bust as you mention you could look at each mortgage and the ability of the borrower to pay. When you have a bubble arguably in government debt, what is the mechanism of transparency to look for?
With the housing bubble there wasn't a good way to look at each mortgage or the borrowers ability to pay. In a lot of cases the mortgage data was falsified or didn't even exist. In the aftermath of the bust several banks could not produce any documentation on homes they wanted to foreclose on.