Bubbles: Part 8 - US housing (2002 - 2006)

Let's look at the U.S. housing bubble that financial engineering inflated from 2002 to 2006 and break down what happened.

What The F#ck Happened?

Setting The Scene

After the 2000 Dot Com crash had wiped out stocks, investors were looking for new, safe sources of return. The tech mania had shown many investors that it was easy to get swept up in the hype of stocks, and it had demonstrated to many creditors that getting money back from bankrupt firms is difficult. 

Investors st…