As Bob Hoye (Institutional Advisors) likes to quip, "In the beginning, the promoter has the vision and the public has the money. At the end, the promoter has the money, and the public has the vision." (cartoon here)

Today, the New York Times ran the Op-Ed "Why I am leaving Goldman Sachs" by Greg Smith a 12 year employee. In the exposé, Greg relates how Goldman Sachs refers to their clients as "Muppets"... a handy pejorative I suppose if you look at your clients as brainless puppets. Large clients who are herded into big yielding profits for Goldman Sachs are referred to as "Elephants" to be hunted down.

Note to Canadian buyers of pumped up real estate: Do your due diligence. As you can see from the graphic above, great real estate bubbles have an end date (Dubai and Ireland are only 2 of many examples) and that's usually when enough participants in the party on the way up start getting the "vision". 

For a better understanding of the sheer callousness of sellers at the peak read the 2 page Op-Ed from the New York Times "Why I am leaving Goldman Sachs" by Greg Smith "... the environment now (at Goldman Sachs) is as toxic and destructive as I have ever seen it."

A Business Cycle Primer  by Bob Hoye  August 4, 2010

"In so many words, Main Stream Economics will be ground between the millstones of Wall Street and Main Street."

Authoritarian Audacity is Going to Crash  by Bob Hoye October 15 2009 

"Since the early 1900s the main pitch has been that economic central planning has been needed for the public good. 

Any impartial review of history would conclude that the notion that an economy is national and can be managed by manipulating interest rates has been some form of madness. 

More specifically, financial history itself is a "due diligence" on every wild scheme ever floated – that's in the markets as well as by financial adventurers in public policy."

Great Depressions Are So Methodical by Bob Hoye May 14, 2009"

One of the features of a great boom is the excitement of shared convictions about eternal prosperity. One of the features of the consequent contraction is bewilderment about how suddenly the bust arrived. 

Beyond those directly hit, the establishment becomes perplexed by the loss of liquidity and wonders where the money went."