How did it happen?

[RichardDTucci]

How did this economic crisis really start? Accident? Design? Or a societal and cultural cause?

[MayaL2012]

wasn't it the banks? i heard that the banks started with a lot of predatory lending cause they wanted guaranteed customers, like serfdomr

[rstevensharris]

Subprime mortgages. Low credit homebuyers getting into the housing market to satisfy Wall Street's ever-greedy need to sell "mortgage backed" securities around the world. As these securities sold like hot cakes, prompted by the flourishing economy (due mostly to the surplus of cash bleeding from this real estate boom [people refinancing their mortgages every few years as their houses increase in value, using their houses like ATMs]), these Wall Street Brokers needed more and more mortgages and lenders were happy to provide them, thus offering even lower credit homebuyers mortgage opportunities. And as these ecclectic, bizarro-subprime mortgages began to default (people just couldn't make their payments when the premiums jumped after a few years), and the housing market began depreciating in value, so did these securities, which totaled something like billions of dollars on the banks balance sheets (Citigroup comes to mind). And with people not paying mortgages, what else is there is rely on?

Is there any other market that so directly affects the American consumer moreso than the mortgage / real estate market? I'm glad prices are resetting. A one bedroom in LA is atrociously overpriced. Let's hoard weapons and blockade an Ark in the desert.

Other than that, remember, a bear market is ofteen followed by the bull. After the Depression of the 30's it was something like 54 years of bull market prosperity. Don't lose faith. The best is ahead.