halfnote19_IHB
New member
I have not always kept a close eye on the market as I was not interested in buying; so I don't know how/why the houses became ridiculously overpriced. Can anyone explain to me how did this housing market boom get started?
How did this all start?
- Thread starter halfnote19_IHB
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NEW -> Contingent Buyer Assistance Program
If you google "housing bubble blog", then I'm sure you'll find a much better explanation of the whos, hows, whys and whens.
But put simply, they are, in no particular order,
1) Yen carry trade - 0 interest in Japan is cheap credit to spend money in states
2) CDO - mortage banks / investbanks bundle anything they can and sell it as a "stock" e.g. student loans, property, whatever
3) The fed removes almost all necessary collateral restrictions on banks
4) The Fed lowers the prime interest rate to historic lows
5) Good old fashioned greed by all parties + cheerleading by newspapers + real estate agents + many other psychological factors
6) Mortage markets do not behave like stock markets
I'm sure I could come up with a handful more. But a bit of researching and you'll find plenty of nuggets. I such the homepage here as a great start.
But put simply, they are, in no particular order,
1) Yen carry trade - 0 interest in Japan is cheap credit to spend money in states
2) CDO - mortage banks / investbanks bundle anything they can and sell it as a "stock" e.g. student loans, property, whatever
3) The fed removes almost all necessary collateral restrictions on banks
4) The Fed lowers the prime interest rate to historic lows
5) Good old fashioned greed by all parties + cheerleading by newspapers + real estate agents + many other psychological factors
6) Mortage markets do not behave like stock markets
I'm sure I could come up with a handful more. But a bit of researching and you'll find plenty of nuggets. I such the homepage here as a great start.
IrvineRenter_IHB
New member
halfnote 19,
Clig on the tag "Analysis" on the left hand side of the main blog page. There are several posts outlining how we got to where we are today.
Clig on the tag "Analysis" on the left hand side of the main blog page. There are several posts outlining how we got to where we are today.