Because no similar global event has occurred before, the stresses to the financial system when the bubble bursts are likely to be unexpected.

This is a prediction, judged at the bursting of the global asset bubble Grantham described in 2007 (horizon about 2007–2009). True: the bubble burst, and the financial-system stresses that followed included major unforeseen events. Examples are the freezing of interbank and short-term funding markets, failures or rescues of major institutions, and contagion paths that contemporaneous official or market accounts describe as unanticipated. Mostly true: the stresses were largely unexpected, but some key features were widely anticipated before the burst. Mixed: about half the main stresses were foreseen in advance. Mostly false: the bubble burst, but the main stresses were mostly predicted and played out as expected. False: no bubble burst occurred, or the stresses were widely forecast and caused no surprise.

Set before the research began.

1. E1 How Our Beliefs Led to the Great Recession - Bocconi University Bocconi University (Bocconi Knowledge, excerpt of Gennaioli and Shleifer, A Crisis of Belief, Princeton University Press) · 4 September 2018

   “The collapse of the investment bank Lehman Brothers on Sunday, September 14, 2008, caught almost everyone by surprise.”

2. E2 How Our Beliefs Led to the Great Recession - Bocconi University Bocconi University (Bocconi Knowledge, excerpt of Gennaioli and Shleifer, A Crisis of Belief, Princeton University Press) · 4 September 2018

   “Only six weeks before the Lehman bankruptcy, in early August 2008, both the Federal Reserve and professional forecasters predicted continued growth of the U.S. economy.”

3. E3 The great financial crisis: Lessons for financial stability and monetary policy European Central Bank · 20 May 2010

   “Although in many respects the crisis that unfolded in 2007 and 2008 can be seen as the direct result of vulnerabilities and imbalances which had been growing steadily and which had been identified fairly early-on, they combined in such ways that few would have anticipated their potential severity for the functioning of the financial system.”

4. E4 The great financial crisis: Lessons for financial stability and monetary policy European Central Bank · 20 May 2010

   “For at least two years before the turmoil began, we issued clear warnings about vulnerabilities that were building up on account of an increasingly aggressive hunt for yield”

An independent account says the Lehman Brothers collapse in September 2008 caught almost everyone by surprise (E1). Six weeks earlier, the Federal Reserve and professional forecasters still expected continued US growth (E2). The ECB said few people anticipated how severe the crisis would be for the financial system (E3). However, the ECB also says the underlying vulnerabilities were identified early and that it had warned about them for at least two years (E3, E4). This fits the criteria's "mostly true" category: the stresses were largely unexpected, but some key features were anticipated.