Evidence Locker: The Tilt Detectors

Evidence locker: Seeing What Others Don't, by Gary Klein, chapter five. Inspector Hale: default rates rose from 1 to almost 4 percent while prices rose. The Bubble: prices only go up, lower the standards, lend to everyone! Wren: if prices never fall, why loosen standards? Nightjar: the boast contradicted the behaviour. Burry made $750 million in 2007; a suspicious mind pays. One saw it and couldn't act; he worked at AIG.

Chapter five of Seeing What Others Don't follows five investors who saw the housing bubble by noticing a contradiction: default rates had risen from 1 percent to almost 4 percent while prices still rose, and lenders who claimed prices could never fall were loosening their standards; Burry made $750 million in 2007 by acting on it, and Gene Park at AIG saw the same thing and could not act, so the lesson Klein draws is that a suspicious mind can pay off.

On the book: Seeing What Others Don't by Gary Klein

Starring

Inspector HaleWrenThe BubbleNightjar