The economy was destroyed by inflation of a particular asset class driven in part by irrational beliefs about that asset class (housing) [1], misunderstanding of large scale risk [2], fraud in the market from players on all sides [3], and deployment of financial instruments which pushed a huge amount of money into the market [4].
Many actions made the lending crisis worse, but it would not have come about without the huge pool of money that went looking for debt. [5]
The point is, it's really easy to make things worse rather than better with a huge amount of money.
Many actions made the lending crisis worse, but it would not have come about without the huge pool of money that went looking for debt. [5]
The point is, it's really easy to make things worse rather than better with a huge amount of money.
1. "Homes never lose value" https://books.google.com/books?id=i2FKCAAAQBAJ&lpg=PT115&ots...
2. "Real Estate Risk Model Inadequate" http://pages.stern.nyu.edu/~lpederse/papers/MeasuringSystemi...
3. "Fraud in Real estate Market" http://www.nytimes.com/2015/02/13/upshot/how-mortgage-fraud-...
4. "Novel financial instruments in home lending" https://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf Page 127 (156 in pdf)
5. https://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf Page xxv (26 in pdf)