Five Lessons From the Mortgage Meltdown

The economy has experienced a mortgage and credit market "dislocation" of historic proportion this year.

However, academics use terms like dislocation rather than trader talk like "crash," "bubble bursting" or "meltdown." But regardless of how it's labeled, there are a few timeless lessons. However, let's start by doing a brief review of what led up to the recent "debacle."

Late 1990s to Early 2000s

• Thanks to the effects of high interest rates, the failure of the savings and loans industry, and excessive speculation of the late-1980s, the real estate market languished for many years. As an asset class , real estate took a back seat to the global thirst for technology and Internet stocks.
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