A few weeks ago I ran across a story with this title on MSN.com. My first reaction was that a statement like that was ludicrous. So I opened the story and skeptically began reading. Now, I don't know if the writer convinced me totally, but he definitely made me see things from another angle.
The writer started off by bringing up some facts. After 9/11 people were justifiably concerned about, among other things, their investments, and the stability of the markets. This caused a massive plunge in the stock market, and the housing market to slow considerably. The Fed jumped in and over the course of a number of months, lowered the interest rates to stave off recession, and to spark consumer confidence. (Sound familiar?) Rates dropped to historical lows, which caused many people, especially investors, and speculators to move their investments from the stock market to the housing market. What followed was an incredible time in the real estate industry. Loans were easy to get, and home prices were appreciating at remarkable rates. And everyone got caught up in it. REALTORS (R), Lenders, Builders, etc., and before anyone could stop and take a breath, the unsustainable growth has crippled many markets, and the infamous "housing bubble" had burst.
This writer made the connection that if it wasn't for the terrorist attacks on 9/11, the Fed would not have needed to drop interest rates so low, the housing market would have continued to increase at mediocre levels, and the housing bubble, and the credit crunch would not have happened.
Like I said, I think it is a little bit of a stretch, and there were definitely MANY other factors that contributed to the housing correction, and the credit crunch. But this story, as far fetched as it sounded when I read the initial title, had me walking away scratching my head and thinking "Could terrorism and 9/11 have contributed to the housing market problems?"
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