housing subsidies, subsidies for risk, particularly in the mortgage market, which included hud mandates on fannie and freddie's behavior and many other government policies that encouraged lax underwriting, especially over time, and increased leveraging in the mortgage market. unfortunately, almost nothing has been done to address this key problem and prevent it from happening again. the second problem was easing monetary policy keeping interest rates far below equilibrium levels for years in a row, 2002 through 2005, which resulted in the underpricing of risk, asset price inflation for risky assets, including housing, and fuelled unreasonable expectations that helped inflate the housing but -- house and bubble.