True. Only if they have zero leverage at play. No borrowed money, no loan to default on. If not then there is most definitely going to be some element of a bailout.
Anecdotal: but in the last month I have come across 6-8 people who have taken or know someone who has taken 2nd mortgages, maxed out their lines of credits, and credit cards to "invest" in crypto.
I'm generally a-ok with investment loans (not from credit cards), they are a good resource to reduce portfolio risk - if the loan remain tax deductible. But what is currently transpiring is insanity.
Someone will definitely get bailed out (hint: it will likely be the banks that's unknowingly provided the leverage).
The current leverage from mortgages are probably not that big. What i am worried is the combined effect of high housing prices & relaxed loan requirements, and upcoming stock market burst.
