The Kentucky Derby is fast approaching, and normally that would mean a flurry of horses being purchased for generally outrageous sums. But not this year. Lending for horse racing has plummeted to $400 million this year, down from roughly $1 billion in 2007, and stud fees are way down, thanks to a popped bubble shockingly reminiscent of the housing crash, the New York Times reports.
Just as with houses, too-easy credit and the assumption that prices would rise forever led to a flooded market. “We ignored the notion of supply and demand,” says one Kentucky real estate exec. “We bred too many horses, overborrowed to do it, and now are caught trying to sell them to people who don't want them.” To make matters worse, gambling takes are down 30%, the Preakness Stakes are bankrupt, and the Belmont is almost too broke to operate.