Originally posted by geobro
nothing happens by accident the housing bubble of 2001 was when i noticed things were not as they seem why would property all across the globe rocket
in price when it had been a stable increase for 400 years ........................ ,houses were going up more a week than i was earning that is why i
live in the country now right beside a river ? and have plenty dried food s& f for this
I don't remember a housing bubble in 2001.
I also don't remember prices jumping that much in a week or even a year.
The bubble is a result of the lowering of lending standards. The government did instigate the circumstances that lead to the collapse. But they
didn’t directly cause the collapse.
With each administration they pushed for more home ownership. When a new family buys a used house (their first) they push a upper tier family into a
brand new and more expensive house. Then every family on the ladder tends to buy new furnishings for their respective houses. That’s the secret to
spurring the entire economy. New car, new clothes, new tv, everything gets a boost.
Had the securities rating companies done their jobs and not caved into the profit side of the equation, the housing rush would have slowed on its own.
The mortgage backed securities would not have been given AAA ratings and therefore would not have sold as quickly on the market. That would have shut
off the supply of loan money.
They wern't smart enough to plan for the last collapse and I don't think they are smart enough to preplan the next.
They are a reactive bunch not proactive.