Sheeple

There truth is no one wants to be alone. Who wants to be the only money manager at a social not buying tech stocks in 2000. Who wants to be the only member of a California neighborhood without an investment property. In the short term the market is a voting machine, but in the long term the market is a weighing machine. In the investment community there is a great deal of group think, which is reaffirmed by rising prices. Fannie and Freddie were more than 90% institutional owned and lets not forget AIG also. There is even an emphasis on what institutional managers are buying so the home gamers can follow. Let me expand on a point I heard from Accrued Interest blog. Leverage was not the problem, the problem was bad investments. Being leveraged 25 to 1 and buying Google or Apple 5 years ago would have been brilliant. Being leveraged 25 to 1 and buying WAMU or Indymac would have been a disaster. Below is another video courtesy of American Public Media's Marketplace detailing the rise of toxic assets.

Toxic assets from Marketplace on Vimeo.