More horrifying half wit market manipulation by the Obami. Make them stop. Please.
Bubbles happen when people believe that the market can only go one way (don’t rent, you’re throwing you’re money away!). The occasional swoons saved by massive Fed liquidity injections simply reinforce the notion that ‘they’ won’t let it get out of hand, ‘they’ will always protect us. So everyone piles in and the rational after 15 or 20 years start looking really stupid so they pile in. The banks, being driven by 5 year career timelines and shareholders who ask: “WTF? 20 years and you guys are still hedging” jump in with both feet.
A monster bank with 100bb in capital is no match for decades of market manipulation by the megatrillion monster government. She rolls over and they’re squashed. This is why looking for the ‘solution’ in manipulations of legal mumbo jumbo regarding the banks is so insane. It’s the state creating these multi-generational one-way bets that crush the economy. Why did the Farm Credit system pop? Real estate. Why did the S&Ls pop? Real Estate. Why did the big Texas and West Coast banks pop in the 80s? Real estate. Why did it pop this last time? Real estate. Our leaders keep driving an insane one way bet. And they're still doing it. The Financial reform contains 243 separate regulatory mandates a new US, Olympic and World Record and zero, zero changes to either our tax laws which subsidize real estate or to the Fannie and Freddies which subsidize real estate or the CRA which subsidizes real estate or FHA which subsidizes real estate. And now the Obami are opening up a new line of credit for politicized lending which I guarantee you will end up subsidizing real estate.
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