I’ve seen this in every boom-bust of any sort I’ve lived through. Individuals who see what’s coming (and usually a lot of people are seeing the writing on the wall just before the tipping point) may possibly protect themselves. However, if you don’t go along with the boom publicly, you will be destroyed.
I remember the .com boom as an even clearer example (no government bailouts to muddy the water), and business journalists who weren’t pushing the boom got let go, CEOs who wouldn’t go along either got fired, or if they were powerful enough to stay out, had the stock market just destroy their share price, and then get bought out by a company who “got it”.
The point of a boom is that while privately it makes sense for people to lock in profits, if your job is to make money for others, you will almost always get fired for not making money when others are. Since few people can time the bust, (I’d have gone bankrupt multiple times predicting busts that didn’t occur for another year or two) if you try to moderate a boom as a CEO, you will be fired and replaced by someone who is willing.
People will tolerate you losing money if everyone else is as well. They will not tolerate you failing to make money when every one else is. A boom-bust isn’t as powerful as it is because everyone is stupid. It’s because there are enormous forces that punish those who aren’t drinking the same kool-aid.
And just for the record, everyone knows the Canadian real estate market is in a massive boom and is completely unsustainable. We the share holding public will destroy the stock value (and the career) of any bank CEO who isn’t riding this boom (and all the banks are).
Do you think that there isn’t a single CEO who isn’t personally protecting themselves by selling a substantial portion of their bank shares now? They’d have to be idiots not to. They’d also have to be idiots for having their company act on that belief.
