Credit Bubble

samizdata.net via instapundit.com

There are just too many culprits in the "sub-prime mortgage debacle" to name, but just a minor addition to the point made in the post;

By skewing the markets adding (non creditworthy) buyers and injecting federally guaranteed capital, the prices paid for the homes were artificially inflated. Thus anyone who purchased a home during this period has already paid for the folly. AND a further reason creditors are reluctant to get back into the lending biz, since the asset values are still not stable, relative to the "real" yet undetermined market values.