What would be the one thing that would cause the stock market to crash? Last big one? What is the over extension of mortgage loans to people who shouldn’t have owned at home. The drive for more money. Bigger is better. Created the housing collapse of 2007 to 2009. so what will cause the next one?
Back in March of this year we saw a regional bank crisis when a handful of banks went under. We live in a world where I can transfer money from one financial institution to another with a click of a couple buttons on my phone. Money market funds started paying more than banks and banks started to lose money, and because of the structure of the assets that they have to hold due to the fact great financial crisis, they were holding treasury bonds in mortgage back securities that became underwater. In my opinion, we will see a small to Regions Bank call apps in the coming years. That money eventually flow to the big 12 banks and financial institutions.
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