Bartiromo on being in the bubble

CNBC anchor Maria Bartiromo was interviewed by Stephanie Jo Klein of Lemodrop.com about her new book, “The Weekend that Changed Wall Street,” and discussed her career in business journalism.

Her is an excerpt:

With our 24-hour news cycle, why couldn’t we predict this?

It’s difficult to recognize a bubble when you’re in it. We’re an optimistic society. We saw home prices rising, and thought they’d continue to go higher. In 2006, there was no justifiable reason the prices were soaring so high, when you look back. It was just a mania. The regulators and others in Washington said ‘this is the American dream to own a home. Let’s make it as easy as possible.’ The lenders said ‘you don’t need to prove that you have a job. We’re going to make it as easy as possible.’ The reporters were watching the markets go higher, so why wouldn’t they continue to do so?

And then you have the actual individuals who said they didn’t have a job and didn’t have the wherewithal to make all the payments, but they did it anyway. You can point fingers all around, but at the end of the day, we were in an optimistic society, and many people missed the cracks in the ceiling. They were visible to some hedge fund managers and short-sellers, but you could go back to various bubbles and have the same mentality. In the dot com boom, anything with a dot com on it soared. That’s one lesson we can all walk away with – maybe I should be more of a contrarian. Back to fundamentals – if it looks too good to be true, it probably is. These are tools to help us when the next bubble comes along.

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