Tesla, Inc. TSLA CEO by Elon Musk eclectic thoughts and views are usually on full display in his tweets. This time, he shared his perspective on the housing market crash. What happened: Musk’s outlook comes in response to a tweet from Dogecoin DOGE/USD co-founder Billy Markus, which goes by the name of Twitter Shibetoshi Nakamoto.
Markus noted in the tweet that the cryptocurrency was created as a statement against central bank control after the 2008 recession, caused by predatory lending practices, leading to the bursting of the housing bubble, the rampant money printing, bailouts, etc. assumed that house prices were only going up.
He also clarified that he does not support predatory lending – a term that refers to unfair lending practices such as higher interest rates, higher fees, etc. Many lenders were seriously injured or did not survive, he observed. “They dug their own graves – a lesson we should all take to heart, including me,” Musk said.
The axiomatic error was that housing prices were only going up. I don’t support predatory lending, but many of these lenders were badly hurt or didn’t survive.
>> see mortgage rates in real time
They dug their own graves – a lesson we should all take to heart, myself included.
— Elon Musk (@elonmusk) May 14, 2022
Related Link: The Housing Crisis, Part 1: An Unbalanced Market
Why it matters: The 2006 housing market crash that followed a bubble was triggered by a combination of predatory lending practices and financial engineering products such as subprime loans that left borrowers struggling with unaffordable mortgages. . This led to a foreclosure crisis among homeowners and a credit crisis among those who held defaulted mortgage-backed bonds. The collapse of Lehman’s brother and the ensuing global recession are all the work of the housing meltdown.
Photo: Includes image from Tesla Owners Club Belgium on Flickr
Original publication: May 14, 2022