Does this sound like what RE investors do?
I was
looking at a blog that offered a French perspective
on the sub-prime crisis and why it is likely to
continue. The following quote does sound like a
typical real estate investor. The writer was
referring to investment bankers or others who make
they income from finance.
The typical investment manager/financial innovator thinks: “If I win, my profit will be proportional to the gross sales I have initiated. If I lose, I will be dismissed, and perhaps I will lose my reputation in the process.” Thinking even further, the manager realises that the downside is limited to being fired, but the upside is limitless. This asymmetry between profits and losses encourages audacity. Once a certain risk threshold is breached, the investment manager who places bets with other people’s money ignores danger. From a social point of view, the problem stems from the divergence of incentives.
"What easy money brought forth in the new century, tight credit will take away in the years to come. Here one of France’s leading economists explains the origins of the subprime crisis and why it is likely to continue to unfold." To read more see The Panglossian World of Finance
