We all have someone we like to blame for the credit crunch, from "Sir" Fred Goodwin to the property porn princess Kirstie Allsopp to Gordon Brown. But when, in the autumn of 2008, it seemed as if the entire global financial system would crumble because of dodgy mortgage lending in certain parts of the US, I thought of Chad and Mike.
These two amiable Southerners, whom I'd met two years earlier at the American Financial Services Association Conference in Amsterdam, came to embody the crisis for me. Later, as I watched the banks fail and the markets crash, I pictured Chad's wide, perspiring forehead, Mike's Sunday-best suit and toothbrush moustache. It was a mild, bright spring day, but the air of the Amsterdam Hilton was stale with the coffee breath of bankers who had flown in on red-eyes from New York and Cincinnati, Dallas and Chicago. I was there as the portfolio manager of a London-based bond fund that had so far refused to buy in to the $1trn market for sub-prime securities. The American executives I was seeing at the conference were trying to change my mind.
Chad and Mike were the last meeting of the day. They were joint heads of credit at one of the more cut-throat sub-prime mortgage lenders. Their job was to oversee the local officers who made sub-prime loans in towns across the United States, ensuring that the company got its money back when it gave someone a mortgage.
We sat in the small meeting room and they talked me through their sentimental vision of an America where everyone had the ability to own a home, where house prices continued to appreciate and the welfare system was increasingly financed by home ownership, and where the discrepancy between white and black participation in the property market had been eradicated. When they had finished, Chad laid his hand on my shoulder. "What you European folk don't understand," he said, "is that home ownership isn't just part of the American dream. It is the American dream."
As I walked back to my hotel that evening, I thought about how Chad and Mike were an anachronism in the new world of finance. Their presence at the conference was essentially a public relations exercise, because mortgage lending had evolved in such a way that mortgages were now packaged and repackaged until the link between borrower and lender was rendered meaningless. Credit experts weren't needed any more: the banks and the brokers were focused solely on generating new loans, which they would then "securitise" - package into bonds to be distributed to pension funds and insurance companies across the world.
So Chad and Mike weren't Lex Luthor types bent on personal gain. They were decent, professional guys who had been left behind in the increasing abstraction of the financial markets. And it was precisely because of their decency, and their belief that what they were doing had some moral justification, that I thought about them so often during the Great Crash.
That property ownership is inherently good is one of the few things that left and right agree about, both in the UK and across the Atlantic. Right-wingers see home-owning as a Republican or Tory virtue: a way of fostering responsibility, nourishing family values and knitting folk together in an asset-based capitalist system. The left sees it a foundation for liberal values: building a sense of community, a defence against rent-gouging landlords and the natural right of a classless society. This consensus is one of the reasons why regulators didn't crack down harder on the sub-prime lenders, and it is why governments in the US and the UK did everything they could to sustain the credit bubble.
The Clinton administration, for instance, had focused on increasing home ownership among ethnic minorities, offering incentives for banks to make loans to black and Hispanic borrowers. A study in 2007 showed that these minorities were 2.3 times more likely to have a sub-prime mortgage than their white neighbours. These minorities are now handing back their keys in disproportionately high numbers.
The French, Germans and Swiss all have property markets that are rental-dominated, and it's time we followed suit. Let me give you three reasons why. First, home ownership anchors us in one location, denying us the flexibility to embrace changes in the structure of our working world. Witness the high levels of unemployment in Detroit, driven by homeowners unwilling to abandon the city even though the automobile manufacturers have relocated (as much as the unions will allow) to lower-cost economies; or the bankers whose refusal to carry out their often-threatened tax exodus from London must in some part be attributable to the fondness they feel for their Chelsea pads.
Second, too many young people are tied to enormous mortgages that leave them feeling trapped. With the ugly necessity of monthly mortgage payments, the young can't afford to make mistakes. And third, our personal balance sheets are too heavily weighted towards property. To have such a high percentage of our personal wealth tied up in the property market goes against one of the main tenets of portfolio management - "diversify".
You know the rest of the story. As telephone-number bonuses return, it feels as if 2008 and 2009 (when home ownership fell in the UK and the US for the first time in a decade) were just a momentary breather in our love affair with property. Chad and Mike lost their jobs in early 2008, but in April this year their erstwhile employer came to the market with its first sub-prime securitisation since the crash.
Alex Preston worked for a decade in the City. His first novel, "This Bleeding City", is published by Faber & Faber (£12.99)