It is started by losing in real estate bubbles, cause the home price rises above sustainable level, and when the bubble bursts. The value decrease, and their related financial product simply disappears.
Also, the banks and credit products are financed through high leverage, and as banks are no longer creditable and taken heavy losses in mortgage related product. They have to de-leverage, and all these moneys financed by credit will disappear.
When too much money is going to unsustainable growth ie real estate, bad thigh is deemed to happen
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