All the discussion about the "crash" by a billionaire of dubious motives...misses the obvious. The "crash" was created in the first 4 months of Bernanke's 14 year New Term as Head of the Fed. He raised rates 2 percentage points over these first 4 months of his term (Sept 2006 to Jan 2007). Then was boasting in January 2007 he would raise them yet again. Now keep in mind that millions of people were "SOLD" creative financing of all types since 2001 by the very banks that crashed. All of these creative loans revolved around Adjustable rates that would only benefit the banks when rates went up. Sounds like everyone got a little greedy to me. They got their payback. Unfortunately, it hurt the average home buyer, who bought in believing in the High prices created by the Lowered rates since 2001 by Greenspan would continue and they would be out in the cold without a home. Please note that homes in the Bay Area of CA went up from an average price of $250,000 in 2001 to $650,000 in 2006. Most thought that this price hike was due to increased demand. It was created by low rates of Greenspan. Please note that the government indexes stated inflation during this period was 2% when it was really 300%
It is only too obvious. Benanke's group wanted to become part of the "Billionaire Club". It backfired on them; and all of us. The Adjustable rates which benefit the lenders only..backfired on the world.
