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The financial crisis of 2008 was not caused by investment banks betting against the housing market in 2007. It was caused by the fact that too few investors - including all of the big investment banks - bet too heavily on the housing market in the years before 2007.

James Surowiecki

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James Surowiecki
Age: 57
Born: 1967
Born: April 30
Journalist
Writer
Meriden
Connecticut
James Michael Surowiecki
Facts
Caused
Years
Investment
Market
Financial
Betting
Crisis
Heavily
Including
Housing
Fact
Banks
Bigs
Investors

More quotes by James Surowiecki

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In the days when corporate downsizing was all the rage, Wall Street took a lot of flak for judging companies too harshly and setting the bar for corporate performance so high that executives felt their only option was to slash payrolls.
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Punk rock has never really had much patience with musical virtuosity. Actually, it'd be more accurate to say that for most of its history, punk has been actively hostile to virtuosity.
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Medical tourism can be considered a kind of import: instead of the product coming to the consumer, as it does with cars or sneakers, the consumer is going to the product.
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Movies' mistrust of capitalism is almost as old as the medium itself.
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Real politics is messy and morally ambiguous and doesn't make for a compelling thriller.
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In part because individual judgement is not accurate enough or consistent enough, cognitive diversity is essential to good decision making.
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Under the right circumstances, groups are remarkably smart - smarter even sometimes than the smartest people in them.
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If you thought the advent of the Internet, the spread of cheap and efficient information technology, and the growing fragmentation of the consumer market were all going to help smaller companies thrive at the expense of the slow-moving giants of the Fortune 500, apparently you were wrong.
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Being out of a job can erode people's confidence and their sense of possibility and employers, often unfairly, tend to take long-term unemployment as a signal that something is wrong.
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The important thing about groupthink is that it works not so much by censoring dissent as by making dissent seem somehow improbable.
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I tend to have a hard time working on pieces long before they're due. That's why I think the fact that I write a column is really good for me - the column has to be done, and there's no getting around it.
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In the auto industry, there's one thing you can always count on: if a new environmental or safety rule is proposed, executives will prophesy disaster.
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The challenge for capitalism is that the things that breed trust also breed the environment for fraud.
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In terms of productivity - that is, how much a worker produces in an hour - there's little difference between the U.S., France, and Germany. But since more people work in America, and since they work so many more hours, Americans create more wealth.
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Of course, plenty of people don't think that guaranteeing affordable health insurance is a core responsibility of government.
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Life insurance became popular only when insurance companies stopped emphasizing it as a good investment and sold it instead as a symbolic commitment by fathers to the future well-being of their families.
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What corporations fear is the phenomenon now known, rather inelegantly, as 'commoditization.' What the term means is simply the conversion of the market for a given product into a commodity market, which is characterized by declining prices and profit margins, increasing competition, and lowered barriers to entry.
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What an economy really wants, after all, is not more investment per se but better investment. It wants capital to flow to companies that will create value - not in the form of a rising stock price but in the form of more goods for less cost, more jobs, and rising wages - by enhancing productivity.
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If army ants are wandering around and they get lost, they start to follow a simple rule:Just do what the ant in front of you does. The ants eventually end up in a circle. There's this famous example of one that was 1,200 feet long and lasted for two days the ants just kept marching around and around in a circle until they died.
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In practice, downsizing is too often about cutting your work force while keeping your business the same, and doing so not by investments in productivity-enhancing technology, but by making people pull 80-hour weeks and bringing in temps to fill the gap.
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