Housing Price Conundrum (part 3)
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@sakthikrishna91 actually this isn't too far off. However it had more to do with switching bubbles from the tech credit expansion of the mid 90's to the housing credit explosion of late 90's to 2k6. 9/11 was more of a foreign policy blowback issue, but it did scare the pants off of many people so it certainly contributed something.
Ultimately it was reflating bubbles to preserve fiction wealth built on credit. The bubble eventually exceeded the previous one by orders of magnitude.
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I'm having a bit of a doubt:The no. of houses increased substantially,whereas population and income were nowhere near able to keep pace with the supply.So prices should have been driven down,meaning more people would have been able to afford houses anyway.So why did lending standards drop? Did it have something to do with 9/11i.e.measures taken to promote spending & prevent recession? Im not from the US, and have no economics background, so pls go easy on me if i've missed something fundamental.
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Ah I see. It seems in principle to allow the standards to drop so that more people who aren't as wealthy can buy homes. But the reality is that this only confuses the market and messes up the value of everything, creating a mess. Very interesting. There needs to be a balance between those ideals of compassion and fair market.
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I was reading about this topic for ages and couldn't understand it completely.
your 3 videos were like a miracle!!
Love from Israel to you and your team!!
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This is so spot on Khan. :) I cant believe this video is uploaded march 15 2008. :)
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Abolutely amazing as always keep uo the great work
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Abolutely amazing as always keep uo the great work
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Does the selling of Mortgage back security a recent phenomena or has it been in existence a long time ago and was botched up recently by Investment Bank? REALLY WANT TO KNOW THIS PLEASE QUOTE REFERENCE THANKS
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@mediblue9 ...and the clowns giving the insurance?
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text Comments satands for writing your comments on the video being presented, but tima ad time again people start to comment about eachother instead of the video.
STOP COMMENTING ABOUT OTHER PEOPLE! IT'S INSANE! FOCUS PEOPLE.
tociph 2 years ago 10
I worked for my brothers insurance agency from 1998-2005, and I couldn't believe the clowns that were getting insurance for a new home. I even had discussions about the the buyers with loan officers from countrywide, which was pretty crazy. Example: a single mother of four with no child support from her ex's, $12/hr job no money down, and allright credit. Ok, we will insure them for $275K. No wonder my brother lost 20% of his agency. Get the picture folks????
mediblue9 1 year ago 7