On Dec 15, 2007, at 2:18 PM, bhandari at berkeley.edu wrote:
> Krugman means that there was a tremendous amount of lending that
> created
> the bubble, as new home buyers were allowed to purchase homes with
> little
> or no money down, and as lenders allowed people who already owned
> home to
> refinance mortgages on the basis of fictitious home price gains.
>
> Why the speculative lending?
Because it looked like a good way to make money. Why else?
Doug