Housing, Bank Balance Sheets, and the Great Depression . Here are some notes of what he proposed: This is a macroeconomic problem. Proposition #1: The Great Recession (2007-2009) as a household/bank balance sheet crisis: Housing is the most unstable component. This gave a new perspective to research that economists did not have. During the Great Recession, housing declined more than anything. From 1997 to 2005, momentum (the rate of acceleration in a stock's price or volume, Investopedia) occurred. As of 1997, there is no longer a capital gains tax on homes up to half a million dollars. The bubble began in 1991. Proposition #2: The imbalance during the Great Depression (1930-1940) as a balance sheet crisis of households and banks: The imbalance during the Great Depression was fueled by a massive flow of credit mortgage. There was too much OPM ("Other People's Money") which tripled between 1921 and 1940. The decline in value relative to fixed debt was significant, but less severe than during the Great Recession....

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