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To: RoosterRedux

No your analysis of 2008 is off.

The loans that were made were made to people who could afford to repay them. As long as they were able to keep their jobs.
There was an oil price spike in 2007 that dried up disposable income and eventually resulted in people losing their jobs. Which of course resulted in mortgage failures.

Practically every recession looks like a property bubble in hindsight.

This time the Federal Reserve and other central banks around the world are fighting inflation. To do that they are raising interest rates, that will likely throw the economy into recession. The stock market has been falling for a while. We are already seeing major layoffs in the tech sector.

A liquidity crisis will happen when banks stop lending. If they see a recession coming they will tighten and stop lending.

It will look like a speculative bubble when it’s done. Jeremy Grantham has been saying we are in a super bubble for a while.


69 posted on 11/24/2022 3:03:47 PM PST by DannyTN
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To: DannyTN
What do you say to people who believe the Subprime Mortgage Crisis caused the recession, starting when people who couldn't afford their houses started to sell, causing a collapse of home prices?

I realize that other factors contributed, but it appeared to me that the primary reason for the housing collapse was easy lending to people who had no earthly means of repaying their loans.

89 posted on 11/24/2022 3:26:16 PM PST by RoosterRedux
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