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A comment on A tale of two bubbles, the dot-coms and Bitcoin. Parent comment

Re:A tale of two bubbles, the dot-coms and Bitcoin by CryptoPunk on Friday December 08, 2017 @05:25AM (#15877810)
CDOs were not new in 2008. The 2008 crash was a result of growing federal intervention in the housing market (federal mortgage guarantees are a huge cash cow for financial institutions and politicians who get appointed as executives of GSEs like Fannie Mae after leaving office) and the FDIC's subsidization of housing construction loans.

There were large markets in car loan and commercial real estate mortgage CDOs that didn't see a crash anywhere near as large as that seen in residential real estate CDOs and construction loans, and that's because they were not subject to GSE loan guarantees and FDIC deposit guarantees, respectively.

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Re:A tale of two bubbles, the dot-coms and Bitcoin by cjensen on Friday December 08, 2017 @11:23AM (#15879785)
You are both right and wrong.

New financial tech takes awhile to become popular enough to become dangerous. So while CDOs were invented in the late 80s, it wasn't until 2000 or so that they started to become a craze that lead to dangerous conditions.

The government through GSEs and FDIC did, as you say, constantly blow air into the housing bubble. CDOs were also a big compounding factor in that they were willing to back an enormous amount of low-interest high-risk loans. Exactly the loans which blew up.

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