Nobody was forced to buy a house. They did it willingly. My wife and I moved to a high cost area during the frenzy. We opted to rent, despite what every person we knew was telling us about "losing out" and "25% value increase per year". I remember trying to explain to an otherwise smart guy that the law of exponents ensures that the prices won't keep going up and that this madness would end badly for many people. In late 2005, a friend (who also rented) and I were guessing when the bubble would burst and when the best time to buy would be; he guessed 2008, while I guessed 2009-2010. I'm not a prognosticator at all; this was an obvious bubble with a foregone conclusion.
I remember all the sob stories in the news, and some people were indeed duped, while many others willingly jumped in with both feet. The lenders in general were no more complicit than all the buyers--folks buying way more than they knew they could afford, folks buying two and three "investment opportunities", folks taking out huge home equity loans to finance lifestyles beyond their incomes. I met and worked with people in all those categories. They thought I was a fool to sit on the sidelines.
Even minority legislators can wield enormous influence on legislation, as Frank and others did. Sorry, but it's true that lenders had no choice to make a certain number of subprime loans which, by very definition, are at high risk of default even when there is no bubble. I remember all the frothy news articles and the Congressional pontificating about the "evil" predatory lenders--who were only one-third of the problem. The buyers and the legislators comprised the other two-thirds.
Anyway, I'm sorry to jump in with politics. I just wanted to point out that inadequate regulation wasn't the problem. No regulations can prevent greed.
Back to bikes!
Last edited by UnderDawgAl; 09-19-20 at 06:42 AM.