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102 sats \ 0 replies \ @SimpleStacker 19h \ parent \ on: There Are Now More ETFs in US Than There Are Individual Stocks - Bloomberg charts_and_numbers
Similar thing happened with mortgage backed securities prior to the 2008 financial crisis.
Investors thought geographically diverse portfolios of mortgages were safe because local housing markets were supposed to be uncorrelated.
But they didn't realize that the aggregate boom in MBS demand was raising house prices everywhere at the same time, creating correlations that didn't exist in the historical data. So when the housing markets started imploded, they started imploding everywhere