Today, our series on the economic challenge facing our country looks at the Fall of 2008. How did this perfect storm gather and then erupt?

As previously noted, the dramatic increase of gas prices in the summer put enormous pressure on family budgets all across the country. Folks with more mortages than they should have had began having trouble making payments. And that led to the housing crisis that had been building for some time.

Next came the banks. With so many people defaulting on their mortgages, banks began to struggle. And when banks struggled then the financial services industry began to struggle. It was a chain reaction that devastated our economy.

And what was the common thread among all these problems? Speculative buying. For example, people bought more home than they could afford because they speculated the values would rise and they would make the money up. But when the housing market crashed, the bubble burst and folks ended up losing their investment.

Tomorrow we’ll take a look how the Fall of 2008 might recreate itself again in the commercial real estate market.