It was demand pull, not supply push.
The creation of slik purses out of sow's ears had created a credit 'mania' on Wall Street, an insatiable demand for 'product', so much so that large brokerage houses felt the need to have their own, captive sub-prime origination units.
There were other factors, but this, more than the others, is explanatory. It explains almost all the pressures created by the demand for volume.
If anything, I'd be looking for evidence that HUD goals raised in the 2005 period and onward, like so much else, followed or abetted the mania, not that they were the cause of it.
Today's hearing details here.
Tuesday, December 9, 2008
Fannie Freddie - First Pass
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