Why the housing market isn't like 2008:
* Fixed rate mortgages interest rates have been very low and many purchased and refinanced with low rates
* Banks' capital structure is much less leveraged that 2008
* The US is still short homes vs the household formation growth
* There are lots of cash sales from boomers retiring and downsizing
* the energy market is declining and causing less stress on the marginal buyer
* working from home makes workers more immune to energy spikes
* retail product inflation is receding and some are deflating. .
so there will be a lot more pain required in the labor market to start the default spiral again.
Note: The 2008 summer olympics in Bejing caused a multi year increase in commodities and energy to build the massive structures for the opening ceremonies. Check the price of energy right before the olympics started and then several months afterwards. . .
However the spike in energy squeezed a lot of marginal home owners and the some of the defaults started. . . choice between driving to job and paying mortgage, and can't pay mortgage without driving to the job. . . defaults started with the over leveraged home owners.
So that squeeze caused some of the overleveraged home owner mortgage defaults, and the spiral started.. . . the payment equilibrium blew up. . .
finance guy who had transferred all mutual funds to cash in the summer of 2007 and gave a presentation of such at work. . . where people had no idea of what I was presenting. . .
good luck
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