[17], Home price appreciation has been non-uniform to such an extent that some economists, including former Fed Chairman Alan Greenspan, have argued that United States was not experiencing a nationwide housing bubble per se, but a number of local bubbles. The burst of the housing bubble was predicted by a handful of political and economic analysts, such as Jeffery Robert Hunn in a March 3, 2003, editorial. Generation X, a term popularized by author Douglas Coupland , started entering the … [11], In 2008 alone, the United States government allocated over $900 billion to special loans and rescues related to the U.S. housing bubble. They further claim that Greenspan actively sought to undermine the office of the Commodity Futures Trading Commission, specifically under the leadership of Brooksley E. Born, when the Commission sought to initiate the regulation of derivatives. If you think this is bad, imagine what it's going to be like in the middle of the crisis." "[30], National home sales and prices both fell dramatically in March 2007 — the steepest plunge since the 1989 Savings and Loan crisis. [58], Among other statements, the reports stated that people "should [not] be concerned that home prices are rising faster than family income", that "there is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors", and that "a general slowing in the rate of price growth can be expected, but in many areas inventory shortages will persist and home prices are likely to continue to rise above historic norms". It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. [99] The head of the mortgage industry consulting firm Wakefield Co. warned, "This is going to be a meltdown of unparalleled proportions. Bear Stearns pledged up to U.S. $3.2 billion in loans on June 22, 2007, to bail out one of its hedge funds that was collapsing because of bad bets on subprime mortgages. A group of experts takes a look—and come to very different conclusions", "Getting real about the real estate bubble", "Housing market may be on ice, but the blame market is red hot", "U.S. 'All Intensive Purposes' or 'All Intents and Purposes'? n. 1. Hunn wrote: [W]e can profit from the collapse of the credit bubble and the subsequent stock market divestment [(decline)]. [106][107] On October 15, 2008, Anthony Faiola, Ellen Nakashima and Jill Drew wrote a lengthy article in the Washington Post titled, "What Went Wrong". Is it any wonder that Wall street is pulling out the stops to avoid such a catastrophe? And a few cities in Florida and California, where home prices soared to nose-bleed heights, could have 'hard landings'. "White Collar Crime in Housing: Mortgage Fraud in the United States." Most leading economic indicators have already turned positive before that. [10], Business Week has featured predictions by financial analysts that the subprime mortgage market meltdown would result in earnings reductions for large Wall Street investment banks trading in mortgage-backed securities, especially Bear Stearns, Lehman Brothers, Goldman Sachs, Merrill Lynch, and Morgan Stanley. There is a fear that foreclosures bring about these reactions in people who anticipate the same thing happening to them. Unregulated Free Market Fundamentalism Zealotry", The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, "The American economy: A phoney recovery", "Is the Party Really Over For the Housing Boom? [2] On December 30, 2008, the Case–Shiller home price index reported its largest price drop in its history. Bust definition is - a sculptured representation of the upper part of the human figure including the head and neck and usually part of the shoulders and breast. Extreme regional differences in land prices. ", "Lender Sees Mortgage Woes for 'Good' Risks", "Recession will be nasty and deep, economist says", "When mainstream analysts compare CDOs to 'subslime', 'toxic waste' and 'six-inch hooker heels' ...", FACTBOX – U.S. government bailout tally tops 504 billion pounds, Tax Break May Have Helped Cause Housing Bubble, "Lowering the Boom? "[61], The US Senate Banking Committee held hearings on the housing bubble and related loan practices in 2006, titled "The Housing Bubble and its Implications for the Economy" and "Calculated Risk: Assessing Non-Traditional Mortgage Products". In his memo, Mr. Andrukonis wrote that these loans "would likely pose an enormous financial and reputational risk to the company and the country". Are home prices soaring unsustainably and due for plunge? Placid definition is - serenely free of interruption or disturbance; also : complacent. [57] David Lereah, former chief economist of the National Association of Realtors (NAR), distributed "Anti-Bubble Reports" in August 2005 to "respond to the irresponsible bubble accusations made by your local media and local academics". The manager of the world's largest bond fund, PIMCO, warned in June 2007 that the subprime mortgage crisis was not an isolated event and would eventually take a toll on the economy and ultimately have an impact in the form of impaired home prices.
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