I am not talking about the derivatives market or the NINJa (No Income, No Job) loans or the pushing of more mortgage than a buyer could afford with teaser rates and the pyramid-like structure of the whole thing...I am talking about what EVENT started the dominos falling that led to the mortgage defaults and then the collapse of the literal house of cards market...
It was a spike in gas prices, in some ways tied to speculative hoarding of crude oil to drive the prices up, but in reality it was once gas got near $5+ per gallon in the US after decades in the $1.50 to $2.50 range (national average cost, not local spikes) that things got dicey FAST... I remember the pump shock at the time and thinking to myself that if it was putting a pinch on MY SPENDING (skipping the convenience store, no more fountain sodas or snacks or extra spending due to the price of a fill up) that it HAD to be impacting other people as much or more in many cases. The mortgage market was ripe for a fall and was being stuffed full of toxic shit for sure, but an EVENT had to trigger the collapse, just as dominoes laid out in patterns require a nudge to start falling, so too does the economy.
IN 2007-2008, crude oil spiked to >$120 a barrel and the price of gas hit a NATIONAL AVERAGE high of $4.11 in July before a rapid decline saw prices return to the "norm" range (around $1.90-2.10) by January of 2009, but the dammage had been done. People on the fringe of the mortgage market, those with the least ability to absorb rate hikes or adjustments following a teaser period started to see no way out - not only was their situation bad, the rise in gas prices and the need to fuel the vehicle to get to work or to get food
meant even less for ancillary things like entertainment spending or eventually the mortgage bill itself...they lacked the resources to do anything more than default and walk away - "Jingle Mail" with the keys in an envelope, became a real problem. When people were suddenly faced with the real dilemma of having no way out besides walking away, thousands did so out of lack of other options.
Those events snowballed into the massive global near collapse of the entire economy...but the conditions alone were insufficient to start the collapse on their own. Right now, the conditions are even worse because there are going to be PHYSICAL constraints brought into the equation beyond the economy or confidence of consumers. It is primed to be worse than anything humanity has ever faced because of the pervasiveness of the overall impacts. The dominoes are in place and laid out for a spectacular fall...all it is going to take is a trigger event, like say Trump refusing to acknowledge an electoral defeat (if we make it THAT far...he is eviscerating the rule of law right now and eventually people will wake the fuck up.....right?.....RIGHT?!??!?!)...
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