2008 is at last behind us and it was what it was. A thoroughly memorable year for the mortgage and real estate industries, and the entire U'S economy for that matter. As years go, a few in the recent history have had as many spectacular market events rumble through the landscape as this one, leaving charred and burnt wreckage smoldering behind.
Some of the true visionaries inhabiting this land had a few encouraging words to pass on about how 2008 would shape up and now they ought to be spanked for ever opening their mouths. Consider this.
"I expect there will be some failures.... I don't anticipate any serious problems of that sort among the large internationally active banks." That was Fed Chairman Bernanke expressing his views on February 28, 2008. This past fall WaMu just flat out fell apart, Citigroup survived on the taxpayer's money to see another day and so on. The list is long and colorful.
"Existing home sales to trend up in 2008." This from NAR's press release dated December 9, 2007. That was an entirely optimistic view of the future that proved to be plenty of hot air that all active housing market observers can attest to.
"Freddie Mac and Fannie Mae are fundamentally sound.... I think they are in good shape going forward." Barney Frank, House Financial Services Committee Chairman, had the nerve to say this on July 14, 2008. Only two short months later the government took over their operations because they were basically collapsing under the weight of bad mortgage paper.
Generally speaking, it's good to be optimistic about life and markets and those sorts of things. Yet, when the writing is rather plainly on the wall, saying something that goes straight against reality is dangerous to your reputation. Not only that but when people in high positions do it the marketplace starts doubting the soundness of the business environment and becomes really nervous about what lies ahead. That predictably leads to more caution and further slowdown of economic activity. Be careful out there what you say.