This simple description of the mechanics of housing and the financial crisis of 2007 is very clear and instructuve. The sad thing is that most students of finance have been taught that the capitalist market economy settles into an equilibrium ... but this is only true when there is an efficient competition. The modern capital market is driven by earnings and growth more than simple supply and demand ... and growth has been facilitated by all sorts of phony ideas about credit.

Crisis of credit

Jonathan Jarvis demonstrates in a very clear manner how the housing boom turned into a terrible financial crisis.