Warnings Unheeded

Abstract

There were many warnings portending the Great Financial Crisis (GFC). Filtering by strict admissibility criteria – (i) direct, (ii) explicit, (iii) credible, and (iv) documented – we identify no fewer than 24 warnings between 2000 and April 2007. Including private and commercial communications (e.g. of hedge funds taking positions in mortgage-linked Credit-Default Swaps), the number climbs higher still. Although a collective failure of imagination can explain why some red-flag developments were not picked up, the warnings documented here were presented with a directness and explicitness to break through the imagination barrier.