I have (more like had now) a friend who works with high net worth clients for Bank of America. When all of this started unraveling in Sept & Oct 2008 and we were watching our 401K value spiral down, I called her to see what her take was on it. We had just experienced two weeks of blackout in Houston after Ike so the information we were getting was sketchy at best because of how it had affected our communications during the hurricane aftermath.
Her response was guarded but she definitely indicated it was going to get worse because of the "real estate bubble". Over the past couple of years she would mention "when real estate bubble goes bad" but would never say why she thought it might unravel.
In Oct. 2008 when I asked her what was happening with her clients, she replied that they had sold all of their clients out of the market in APRIL 2008!! They were all in CASH so they were golden in their client's eyes!!
Talk about having an inside view of the writing on the wall!!! They protected their clients with that knowledge while all of the small retail investors and regular folks with their 401Ks took a beating with the downturn!!
YES ... from that .... you can bet the banks knew what was going to happen and were doing everything they could to protect themselves and their big money clients.
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