-JUST- on the housing side you had Inflated assessments (A lot of places got in trouble for this in the aftermath,) a tendency to do ARMs and being unprepared for an interest spike, NINJA loans, and the general expectation by too many people (both securities handlers and homeowners) about correlated vs individual risk.
On the homeowner side, correlated risk and the subsequent drop in their home's value resulted in a good number of defaults, leading to a second drop in values (lest we forget the 'goodbye parties' some of these people threw in their temper tantrums on defaulting, a coworker of mine was able to buy one of those on the cheap but it needed a lot of repairs.)
We cannot forget however that general the whole populace, both citizen and corporation, were drunk on 'cheap' credit. (Which is my biggest concern about our current situation, I think some people still are.) When they were unable to refinance existing debt on terms as good as before, or rates on other lines of credit went up, it became harder to service said debt.
I can think of at least two cases where 'expansion' efforts in the age of cheap credit (In one case it was expanding a chain, in another it was launching a new line of business,) led to death spirals of the companies in question.
-JUST- on the housing side you had Inflated assessments (A lot of places got in trouble for this in the aftermath,) a tendency to do ARMs and being unprepared for an interest spike, NINJA loans, and the general expectation by too many people (both securities handlers and homeowners) about correlated vs individual risk.
On the homeowner side, correlated risk and the subsequent drop in their home's value resulted in a good number of defaults, leading to a second drop in values (lest we forget the 'goodbye parties' some of these people threw in their temper tantrums on defaulting, a coworker of mine was able to buy one of those on the cheap but it needed a lot of repairs.)
We cannot forget however that general the whole populace, both citizen and corporation, were drunk on 'cheap' credit. (Which is my biggest concern about our current situation, I think some people still are.) When they were unable to refinance existing debt on terms as good as before, or rates on other lines of credit went up, it became harder to service said debt.
I can think of at least two cases where 'expansion' efforts in the age of cheap credit (In one case it was expanding a chain, in another it was launching a new line of business,) led to death spirals of the companies in question.