[quote=AN]jpinpb, I bet we’d still have a bubble if rate stay high but and have subprime, negam, etc. loan programs.[/quote]
It’s very likely that low rates caused loose lending. When investors are not able to earn forecasted returns over many years, they have to reach for yield by moving out on the risk curve (think: pension funds). They were able to earn higher returns with the riskier debt…at least for a little while.
