Part 5/11:
However, this growth has often been fueled by lax underwriting standards and a focus on volume rather than fundamentals. As Jeff notes, “underwriting has gone by the wayside,” which is a dangerous signal for financial stability. Historically, every credit cycle has been characterized by greed, where market participants rationalize away risk, leading to bubbles. The current environment is reminiscent of pre-2008 behaviors, with mounting parallels to the last major financial crisis.