patrick.net

ZippyDDoodah says

Not to belittle your point too much, but residential RE projects compete for land and construction materials with commercial projects right? So a bubble in GSE driven residential prices would force up land and contruction material prices (and labor prices?) for commercial property as well, right? I’m a bit surprised to see the charts which suggest that CRE went up to the same degree as residential RE.. more here http://ur.lc/jmi

There is probably some validity to the idea the CRE bubble was in response to the housing bubble. I'm dubious though. I personally almost invested with a partner in 2004. Spent a lot of time educating myself on the RE economics and finance, going to seminars, talking to other investors. Having been smack in the middle of the dot com boom, it smelled a lot like a bubble to me and I didn't bite. Lots of new investors (including myself), many just chasing returns (though not capital gains, just alleged rates of return). And lots of easy, easy money. Lenders did not care if the sellers statements on CAP rate, cash flow, etc. were complete bullshit. Just took their huge fee, and as long as you were starting with 20-30% equity they gave you the loan. 20-30% clearly didn't cut it when values fell by 50% though.

When I watch that youtube video, I get pissed off too. I'm for good governance, and defending a government sponsored institution in the midst of an accounting scandal is not good governance. I particularly do not care for Rep. Waters. Corruption vs. good government are not partisan issues though, and above all else that's why I take issue with your statement "Both sides are not “equally” guilty in the leadup to the housing blowup."