HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
Latest News
New Jersey
New Jersey & Texas
Write Letters to the Editors
TRCC in the News
Texas TRCC Scandal
Fair Use Notice
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
We have 1 guest online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
BusinessWeek Commentary: Lessons From Credit Disasters Past
Saturday, 04 August 2007


Commentary: Lessons From Credit Disasters Past
History suggests that despite the subprime mess, money will keep flowing

The subprime mortgage market is toast, at least for the foreseeable future. And now the turmoil at American Home Mortgage Investment Corp. (AHM )—which made loans to home buyers with decent credit—suggests that the troubles are spreading to the broader mortgage market. Fearing the worst, investors are nervously demanding higher rates for bonds from corporations with no direct subprime exposure.

But the history of the past 20 years indicates that the subprime debacle, as spectacular as it is likely to be, won't knock out the broader flow of credit in the economy. Since deregulation took hold in the 1980s, the U.S. has developed a financial system with a high degree of redundancy. Worthy corporate and individual borrowers have more than one avenue for raising funds. The financial system has become like the Internet: able to reroute credit around damaged sections with relative ease.

Take a look back at the "credit crunch" of the early 1990s. As big banks such as Citicorp, as it was called then, struggled with bad real estate debt, they cut back on lending. In particular, new bank loans to businesses virtually stopped in 1990 and did not resume until 1994.

But the credit crunch did not extend to the bond market. While banks kept their vaults closed, corporations raised almost $250 billion between 1990 and 1994 by issuing bonds. As a result, companies such as Wal-Mart Stores (
WMT ), which borrowed billions over this period, had the money needed for expansion.

Read More on Businessweek website

< Prev   Next >
Search HOBB.org

Reckless Endangerment

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon

Barnes & Noble

Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Texas Regulates Homebuyers
Texas Comptroller Condemns TRCC Builder Protection Agency
TRCC is the punishment phase of homeownership in Texas

HOBB Update Messages

Consumer Affairs Builder Complaints

As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

TRCC from Bad to Worse
Case of the Crooked House

The Pat and Bob Egert Building & TRCC Experience 

Builders Looking for Federal Handouts

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

Drum Major Institute
for Public Policy

Tort Deform
Report Your Arbitration Experience

Homebuilding Texas Style
And the walls came
tumblin' down

 Texas Homebuilder
Bob Perry Political Contributions

  The Agency Bob Perry Built
 TRCC Connection News
Tort Reform

NPR Interview - Perry's
Political influence movement.
Click to listen 


Have you seen any of these individuals

 Feature: Mother Jones Magazine
Are you Next?
People Magazine - Jordan Fogal fights back
Because of construction defects Jordanís Tremont Home is uninhabitable
You could be the next victim
Interview with Award Winning Author Jordan Fogal

Special Money Report
Big Money and Shoddy Construction:Texas Home Buyers Left Out in the Cold
Read More
Read Report: Big Money…
Home Builder Money Source of Influence

Letters to the Editor
Write your letters to the Editor

Homeowner Websites

top of page

© 2018 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.