Market crashes or panics can be thought of as like a big earthquake, and not just because that’s what it feels like for many. The old joke of 401k’s becoming 201k’s wasn’t really funny at the time, and in late 2008 and early 2009 people all over the world were devastated by the crash.
Listening to Economists on TV, and especially central bankers like Ben Bernanke, you were left with the impression that the Panic of 2008 was totally unexpected; a bolt of destructive lightning from out of the blue. That was patently false, and many like Bernanke knew it. There were warning signs all over the place, minor tremors evident for more than a year and a half that “something” bad was building.
