In 2005, hedge fund manager Stan Druckenmiller received a visit in his office from a Bear Stearns analyst who advised him to start shorting the subprime market because it was going to crash. Soon after, an analyst from Lehman Brothers told him the same thing. Four years later, after Bear Stearns and Lehman each fell victim to the subprime mortgage collapse, the meetings appear to lend credence to the notion that investment firms were playing both sides of the market at the height of the housing boom. But although the firms are facing major criticism for making contrary bets, “it’s a huge leap from there to fraud,” said CNBC on-air editor Charles Gasparino, author of “The Sellout,” which depicts these scenes. The book, now in stores, argues that the real crime that went on prior to the housing crash was “30 years of mindless risk-taking, and the government basically subsidizing that risk,” Gasparino said.
Gasparino, author of “The Sellout,” says government subsidized “30 years of mindless risk-taking”
TRD MIAMI /
Nov.November 03, 2009 11:26 AM