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Originally Posted by Rhylan
Should be an opportunity for investors, too. If there really is a credit market crunch then financially sound lenders should be able to charge a small premium on account of actually being in a position to lend. Not enough to affect the consumers of the loan significantly, but in aggregate across the wider base of loan recipients, a nice plus for these institutions.
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and to an extent this is fine.. as long as those investors exist. But lets not forget that often these investors would get financing from.... well, banks.... for this sort of activity. some other sorces of liquidity and capital exist... but banks are affecting both the supply AND the demand for this market too much... when it starts slipping there is a quickly reinforcing negative feedback loop that can QUICKLY wipe out all value. AND once these loops really start... it is too late for govts to intervene, they can only pick up the pieces (which likely would be REAL nationalization. something we really really do not want to see)