I read a book a while back that suggested the bond market is the surreptitious driver of everything. However, my understanding is that a huge pool of cash was chasing better rates than US Treasuries were providing, and that it was MBSs and CDOs that filled this gap. The rest is history.
California is probably a bit of a unique case, and since the effects of both the subprime crisis were magnified it’s perhaps not surprising that government intervention has had an exaggerated effect.
Emotions have a habit of driving one’s point of view, but a snap shot of where we are currently still paints a sullied picture, which may not be ever-worsening, but is still never-lessening. I’m speaking of jobs and foreclosures, and hedged predictions by many eminent pro’s of a double dip. While you may ignore this at your peril, it’s not possible to say with real certainty where things will go from here.
