Real estate was not his area of education. Hell 95% of the so called real estate professionals, plus, developers and bankers thought the supply of people that could buy a 300000 house was unlimited and that a year later they would have an unlimited supple of buyers for a 350,000 homes. Pure ignorance of the market.
You can’t afford $32.00/hour workers on a $65,000.00 house. Bubble solved.
No one did except for Chris Dodd and Barneys Frank.
Herman Cain didn’t put the arm on lenders to fork over forty and fifty year no-money-down loans of a half a million dollars for McMansions in the DC suburbs to government clerks and secretaries, who augmented their “found” money with a flat screen TV and BMW and a Hummer in the driveway.
No, that was the Democrats.
The Fed Charimain, Bernanke MISSED IT (he has 1000 economists working for him)
The Treasury Secretary Paulson MISSED IT
Ex Fed Chair Greenspan MISSED IT
Hundreds of so called expert economists MISSED IT...
The statements about Cain make no sense...unless one is a PTard..
"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"
Go back and ask Barney Frank what HE knew about the bubble. Dodd? Reid? Pelosi? Paulsen? Geithner? Bernanke? Obama? Ferris Bueller? Anyone?
One common thread among all bubbles is...not a single major bubble burst could be predicted precisely. The reason for this is that bubbles can grow to extremes, beyond logical and rational valuations.
Housing bubble did not deviate the rule!
The housing bubble in those cities used in this article was not caused by "land use regulations" Those cities are the same ones where a huge influx of illegal aliens with huge instantaneous housing needs were issued the no docs, no down payment, no income required subprime mortgages that were certain to go into default.
Those mortgages and their attendant bundling into derivatives created a mortgage Ponzi scheme that was guaranteed to fail. And when it did, it brought down the financial house of cards, causing banks to fail and otherwise good mortgages to go under water as housing values collapsed.
Here is a more detailed article that appeared in Human Events in 2009.
Wow... we (the commercial insurance agency I worked for) were stressing about the upcoming ‘housing bubble’ back in 2005-2006 as it would surely affect our interest in the thousands (hundreds of?) dollars in commission lost if and when our mega-builders that were our clients hit the bubble pop.
Why did no one else see it?
And I am NO financial genius (my portfolio is sad testimony to that fact).....but I have at least a few brain cells functioning and could see that when my neighbors making $75-$100K a year were refinancing their houses at half a mill (lots of new Bimmers, boats and Harleys in the driveways in 2004-6!), we were cruising for a bruising.
Of course, since I was not making money from originating liar loans or building crapbox McMansions, that gain on my house was all I made from the bubble.
I got flak like you wouldn't believe when I advised a couple of my neighbors to sell. I was a wet blanket, a gloom and doomer, a turd in the punchbowl. These days, we mostly talk about sports and the weather, not the economy.....