Don't believe the excuses: plenty of people saw the 2008 crisis coming

The received wisdom today is that nobody saw the 2008 crisis coming. But that's just not true, says. John Stepek Lots of people saw it coming, and said so at the time.

180921-rajan

Raghuram Rajan warned of the danger of derivatives back in 2005
(Image credit: 2017 Hindustan Times)

In November 2008, the Queen opened a building at the London School of Economics. With a level of diplomacy that might be more closely associated with her husband, she asked one of the professors there why no one had seen the crisis coming. Specifically, said Professor Luis Garicano, "The Queen asked me: If these things were so large, how come everyone missed them?'"

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.