The Great Housing Bubble Was a Credit Bubble, Opines Lawrence Roberts in New Book

Lawrence Roberts, considered the Housing Bubble Cassandra, in his new book, The Great Housing Bubble, demonstrates that the housing bubble was a credit bubble fueled by greed. He identifies the root causes of the credit bubble, outlines the sequence of events causing the rise and fall in prices, and issues a stern warning about government intervention in the markets.

[USPRwire, Tue Jan 13 2009] Lawrence Roberts, author of “The Great Housing Bubble,” identifies the root causes of the housing bubble as the following: “1. Separation of origination, servicing, and portfolio holding in the lending industry. 2. Innovation in structured finance and the expansion of the secondary mortgage market. 3. The lowering of lending standards and the growth of subprime lending. 4. Lower FED funds rates as an indirect and minor force.” He believes the combination of these factors inflated the housing bubble.

In the book, Roberts makes the case that housing prices went up because too much credit was made available. He notes, “Lenders encouraged borrowers to take out loans under unstable terms. When these borrowers began to default, the lenders stopped lending, and we had a severe credit crunch. The reduction in lending and the restriction of loan terms caused house prices to fall back to sustainable price levels.” He believes this sequence of events will repeat if the system does not change.

Roberts warns about government intervention in the financial markets, particularly the credit markets, “The Great Housing Bubble was not really about housing; it was about credit. Housing just happened to be the asset class into which this capital flowed. It could have been stocks or commodities just as easily, and if the government gets too aggressive in its actions to prevent a collapse in housing prices, the liquidity intended to prop up real estate prices will likely flow into some other asset class creating yet another asset price bubble.” Roberts wonders when the government will stop trying to manipulate financial markets, “We are on a path toward central planning and market control similar to the old Soviet Union. This isn’t the America I used to know.”

About the Author, Publisher and Book

Lawrence Roberts, author of “The Great Housing Bubble,” is known as the Housing Bubble Cassandra. He publicly predicted the housing price crash as the primary writer for the Irvine Housing Blog (http://www.irvinehousingblog.com/). From his unique vantage point in Irvine, Calif. – the center of the subprime universe – Roberts carefully documents in his book the conditions and practices that inflated the largest real estate bubble in history. He holds a Master of Science in Land Development from Texas A&M University, and he consultants to the land development industry.

Monterey Cypress Publishing is a small press specializing in real estate and personal finance related books, audio books, and video presentations.

Purchase “The Great Housing Bubble,” at Amazon.com. Obtain free ebook here: =>
http://www.thegreathousingbubble.com/

Contact:
Lawrence Roberts
Monterey Cypress Publishing
Irvine, CA
(949) 599-1250
montereycypressllc@gmail.com
http://www.thegreathousingbubble.com/