BUBBLE, BUBBLE
If you’re not reading the Irvine Housing Blog, you should be. Republican finger-pointing (at poor brown-skinned folks) notwithstanding, the housing/Wall Street crisis is due entirely to too much leverage. And it’s not even close to finished unfolding. Some of the largest hedge funds are still leveraged at close to 10:1. If the market continues to fall, their positions will have to be quickly unwound, sending the market down still further. Perhaps the only thing keeping the whole system afloat right now is the hedge funds’ restrictive redemption policies.