I remember driving around in the early 2000s and asking myself, "Self, who is going to buy all the new houses I see being built?" To me it seemed that there was far more supply than was needed to meet any possible demand, but I also remember thinking to myself, "Self, the people in real estate are a lot smarter than you are and they must know what they are doing." I also remember getting statement after statement after statement saying that our mortgage had been "sold" from one company to another and another. I remember thinking to myself, "Self, this doesn't make any sense. Why did this sort of thing never happen in the past?" Again I remember assuming, "well, they must know what they are doing."
The moral of this story is that if even I, who have absolutely no financial expertise, felt that worrying things were happening, why did not most economic "experts" have the same reaction? A few did -- N. Roubini being the most famous -- but I am astonished that so few did. I recall reading an article by Ambrose Evans-Pritchard (a British economic journalist) a few years before 2008 in which he essentially predicted exactly what subsequently happened. I remember thinking at the time, "this fellow is an alarmist; this can't be true." But he was dead right. I now read his columns with great interest.