Are We on Some Sort of a Cycle? Exactly 14 Years Later, Another Housing Crash Has Arrived

[corbe]

Are We on Some Sort of a Cycle? Exactly 14 Years Later, Another Housing Crash Has Arrived

by Michael Snyder  August 24, 2022


Roamers house is NOT For Sale

Do you remember what happened precisely 14 years ago?  In 2008, the housing market collapsed and the subprime mortgage meltdown made national headlines day after day as unprecedented panic swept through Wall Street.  To many of those that were working in the financial industry at that time, it seemed like the world was ending.  Of course the world was not actually ending, but without a doubt it was an extremely painful episode for our nation.  Countless Americans lost jobs or homes (or both), and the ripple effects of that crisis can still be felt today.

But did you know that there was another housing crash exactly 14 years before the one that we witnessed in 2008?

In 1994, surging mortgage rates caused new home sales to plunge dramatically…

The average 30-year fixed mortgage rate increased by around 2 percentage points in 1994, ending the year north of 9%. New home sales slumped. In December 1993, the seasonally adjusted annual rate of new single-family-home sales was 812,000. A year later, in December 1994, it had fallen over 20% to 629,000.

That kind of sounds like what we are experiencing right now.

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https://noqreport.com/2022/08/24/are-we-on-some-sort-of-a-cycle-exactly-14-years-later-another-housing-crash-has-arrived/

[EdinVA]

Emergency Economic Stabilization Act of 2008
A financial crisis had developed throughout 2007 and 2008 partly due to a subprime mortgage crisis, causing the failure or near-failure of major financial institutions like Lehman Brothers and American International Group. Seeking to prevent the collapse of the financial system, Secretary of the Treasury Paulson called for the U.S. government to purchase several hundred billion dollars in distressed assets from financial institutions. His proposal was initially rejected by Congress, but the ongoing financial crisis and lobbying by President Bush ultimately convinced Congress to enact the proposal as part of Public Law 110-343.
Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation.^[3]

Yes, a cycle of boom, bust and bailout

[DefiantMassRINO]

No more bailouts.  In 2008, only the rich got bailed out.  The banks should have been prosecuted under the RICO statutes.  The corporate executives should have had their performance bonuses clawed back.  Some Congressmen and Senators should have been prosecuted, expelled, or censured.

[Weird Tolkienish Figure]

No more bailouts.  In 2008, only the rich got bailed out.  The banks should have been prosecuted under the RICO statutes.  The corporate executives should have had their performance bonuses clawed back.  Some Congressmen and Senators should have been prosecuted, expelled, or censured.

Welp, after the damage was done, the shares should have been liquidated (auctioned?) and returned to the taxpayers. Of course that was never going to happen.