Into the Night
Verified User
Banks made the loans, banks traded the loans with each other, each over speculating. People bought properties they had no business buying, hoping to make a quick flip and make money. Banks issued 'balloon loans' for such speculators. When they couldn't unload their property for a profit, the balloon loans came due, causing the crash.
That crash took the form of a debt crash. It did not affect the stock market until later. Due to interference by Obama, the crash wasn't allowed to unwind naturally, extending the effects throughout the Obama years.
The easy cash from the Federal Reserve was the enabling factor. That came from Congress, not Bush.
One fairly large local bank around here, Washington Mutual, was destroyed by over speculation. The remnants were sold to Chase Bank (one of the banks that were bailed out).
