My first awareness of the American housing bubble was Casey Serin’s blog. He was a hapless “investor” (speculator, really) who had bought half a dozen houses, intending to make money by reselling them quickly, as prices continued going up. Except that they stopped going up, and he found himself in debt for hundreds of thousands of dollars. He blogged openly about his woes, and built up an audience of haters who pointed out that he had broken the law in various ways. Many eagerly awaited the day when the FBI caught up with him. But by the time that happened, the crisis had moved on to the Wall Street banks who had been packaging the mortgage debts of people like Casey, and selling them to their own “investors”, and we were in the era of billion-dollar bailouts and emergency G20 summits.
I have not kept track of the conventional wisdom regarding the cause of the 2008 recession, but I would hope it was something like: there was reckless lending and borrowing at every level, from local real estate to corporate finance to government bonds, and the bursting of the housing bubble simply exposed the vulnerability of this house of cards. Erdmann apparently doesn’t have much to say about this larger context?
The book has lots of statistics that hint at why your narrative is misleading. Since you seem to prefer examples of individuals over statistics, I’ll point you to an Erdmann blog post about a responsible borrower who got misleadingly used as an example of someone who banks were recklessly lending to.
My first awareness of the American housing bubble was Casey Serin’s blog. He was a hapless “investor” (speculator, really) who had bought half a dozen houses, intending to make money by reselling them quickly, as prices continued going up. Except that they stopped going up, and he found himself in debt for hundreds of thousands of dollars. He blogged openly about his woes, and built up an audience of haters who pointed out that he had broken the law in various ways. Many eagerly awaited the day when the FBI caught up with him. But by the time that happened, the crisis had moved on to the Wall Street banks who had been packaging the mortgage debts of people like Casey, and selling them to their own “investors”, and we were in the era of billion-dollar bailouts and emergency G20 summits.
I have not kept track of the conventional wisdom regarding the cause of the 2008 recession, but I would hope it was something like: there was reckless lending and borrowing at every level, from local real estate to corporate finance to government bonds, and the bursting of the housing bubble simply exposed the vulnerability of this house of cards. Erdmann apparently doesn’t have much to say about this larger context?
The book has lots of statistics that hint at why your narrative is misleading. Since you seem to prefer examples of individuals over statistics, I’ll point you to an Erdmann blog post about a responsible borrower who got misleadingly used as an example of someone who banks were recklessly lending to.