Actually...
Home prices rising is not a bad thing, but it's not an indicator of economic health for those who aren't already well off. Renting a home is an economic burden, not an investment; home prices rising while median wages fall is how you continue to widen the already-growing wealth gap. The trickle of construction jobs derived from private equity scooping up these devalued homes doesn't go any significant distance towards reversing that.
Sure. But a high-risk mortgage in default is just a high-risk mortgage in default. It only becomes an economy-wrecking problem when the finance industry and the ratings agencies conspire to fraudulently make that high-risk mortgage appear low-risk, thereby attracting significant investment.
I'm not arguing that government oversight is a magic tonic that will always fix everything. I'm arguing against the idea that private investment is a magic tonic that will always fix everything.
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