----- Original Message -----
From: "Indian Jones" <lburgindianjones at gmail.com>
123hop at comcast.net wrote:
> The risk was in plain sight: it lay in the divergence between income
> and house prices.
And the unsuccesful risk "mitigation" instruments proliferated before a market crash. The market should have been more capable of evaluating this divergence than individual homebuyers yet it "failed". Severely. No, either it was in plain sight but not seen or it was not put in plain sight.
Wikipedia: "The essential fact is that "risk" means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; ..." If this risk were "susceptible of measurement" the estimations were not true. If it was not susceptible, the estimators were not honest. If you grant them the former, you cannot say they saw the risk in plain sight.
Risk based on the misperceptions of homeowners of risk in "plain sight" is not coherent let alone "susceptible to measurement". This was a con game through and through.
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I think we agree. The "market" had no skin in the game. Only the taxpayers paid.
Joanna