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>Have any two financial crises happened for the same reasons? Yes, they all do. Fundamentally, they are the result of leverage (usually with a significant amo
by DebtDeflation 7y ago
>Have any two financial crises happened for the same reasons?
Yes, they all do. Fundamentally, they are the result of leverage (usually with a significant amount of maturity and liquidity mismatch) being used to bid up the price of capital assets. HIGHLY recommend reading Irving Fisher's "Booms and Depressions" and "The Debt Deflation Theory of Great Depressions" as well as pretty much everything Hyman Minsky wrote as a starting point. This is a subject that has fascinated me for decades.
- isoskeles 7y agoI believe the question implied "reason" being something more specific like mortgage-backed securities or a tech bubble, not something generic. Also, the submission was previously titled something like, "Banks are cozying up to the same types of mortgage bonds as the ones from 2008."
- DebtDeflation 7y agoYes, the specific capital asset - be it tulips, tech stocks, real estate, or something else - will definitely vary.