By Roger Lowenstein Published May 5, 2010 11:00 a.m.
“The bubble began at the dawn of the 21st century, and fed off the elixir of ultra-low interest rates. Low rates had been orchestrated by the Fed chairman, Alan Greenspan, with the steadfast support of his then-fellow Fed governor, Ben Bernanke. With credit cheap, Americans flocked to refinance their homes and to bid up the prices of new ones. This much was predictable. But the mortgage boom of the early 2000s was unlike others. A wave of unorthodox lenders sought to lure customers whose credit was judged to be less than prime—that is, subprime. These eager lenders were hailed as suburban Johnny Appleseeds, planting a mortgage in every backyard. Instead of a mere boom, they incited a social upheaval, much as did the dot.com promoters a decade earlier.”
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About Roger Lowenstein | Roger Lowenstein, author of the bestselling Buffett: The Making of an American Capitalist and When Genius Failed: The Rise and Fall of Long-term Capital Management, reported for the Wall Street Journal for more than a decade and wrote the Journal’s stock market column “Heard on the Street” and also its “Intrinsic Value” column. He now writes for the New York Times Magazine and Bloomberg. His latest book is The End of Wall Street. He lives in Newton, Massachusetts.
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