||Using the weekly U.S. banks' balance sheet from 1975:Q1 to 2010:Q2, this paper shows that the cause to housing bubble is the credit shift from defensive liquidity assets to mortgages, rather than the non-existing 'easy credit'. The finding inspires a new systematic explanation to the recent bank panic, different from the conventional wisdoms in several ways. First, we found that money supply and aggregate deposits were stable in 2000s. When under such capital supply restriction, banks had to cut off other assets to finance real estate loans, making them more cautious with mortgage issuance. Secondly, the shadow banking system is not only a channel between investors and borrowers, but also a platform for banks to share and eliminate idiosyncratic liquidity risks. The continuous expanding of the shadow banking system encouraged banks keep reducing the defensive liquid asset. Last, the blindly expanding of the shadow banking system combined market risk, liquidity risk and credit risk. As current risk management treats the risks separately, such combination crashed both the shadow banking system and the global economy.