The ‘black’ hole in Robert F. Kennedy Jr.’s housing conspiracy theory

Robert F. Kennedy Jr. has been pushing his conspiracy theory that the massive increase in foreclosure rates in the United States in the mid-2000s was actually part of a plot by banks to manipulate the housing market for their financial gain. Kennedy argues that banks deliberately manipulated the subprime mortgage market, packaging risky loans to vulnerable homeowners, then used credit default swaps to insure against the risk of debt default. This allowed them to make money while creating an environment where homeowners couldn’t keep up with their loans, and so the foreclosure rate skyrocketed.

However, this theory has largely been debunked due to a lack of evidence. Studies conducted into the factors leading to the housing crisis have failed to find evidence of banks deliberately causing the crisis. Furthermore, economists suggest that the crisis happened due to a combination of factors such as rising interest rates, over building, loose lending standards, and reckless speculation. Consequently, while there may have been some predatory practices during the housing crisis, there is no proof of a ‘black hole’ conspiracy as described by Kennedy.