Saturday, January 09, 2010

Did predatory lending cause the housing bubble?

Or, for that matter, did the Community Reinvestment Act? Paul Krugman compares housing prices to commercial real estate prices and draws a conclusion I agree with:
From my perspective, the CRE bubble is highly significant; it gives the lie both to those who blame Fannie/Freddie/Community Reinvestment for the housing bubble, and those who blame predatory lending. This was a broad-based bubble.
This doesn't mean that predatory lending didn't exist. It simply means that predatory lending was a result of the housing bubble, not a cause of it.
Posted by at 8:59 AM

3 comments:

  1. AnonymousJanuary 09, 2010 10:15 AM

    This reminds me of the dot-com bubble crash. I was a daytrader back then, sharing IRC forums with market makers. When the crash began, a handful of market makers came forth to reveal that they were directed to intentionally bid up the market over several months, in order to create a bubble trap. I believe some of them even wrote books afterward. This is all about wealth transference from America's powerful middle class, to the international central bankers who wish to recreate the global economic system, in order to ensure they retain their power for another 1,000 years. Read about the UN's Agenda 21, in detail. It covers all aspects of human life for the 21st century.

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  2. AnonymousJanuary 09, 2010 1:04 PM

    "it gives the lie both to those who blame Fannie/Freddie/Community Reinvestment for the housing bubble"

    And those who seem not to notice that the bubble also happened in the UK, Ireland, Spain, etc. Were fannie & freddie responsible for that?

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  3. JamesJanuary 09, 2010 1:41 PM

    Anonymous said...
    "I was a daytrader back then"

    day trader = gambler
    gambler = sucker

    There's a lot of research that says the more often people trade, the lower their average return.

    This is all about wealth transference from America's powerful middle class, to the international central bankers who wish to recreate the global economic system, in order to ensure they retain their power for another 1,000 years. Read about the UN's Agenda 21, in detail.

    Central bankers don't make money off of bubbles. They earn government salaries.

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