The Rise and Fall of the US Mortgage and Credit Markets

A Comprehensive Analysis of the Market Meltdown

Author: James Barth

Publisher: John Wiley & Sons

ISBN: 9780470493885

Category: Business & Economics

Page: 528

View: 8860

The mortgage meltdown: what went wrong and how do we fix it? Owning a home can bestow a sense of security and independence.But today, in a cruel twist, many Americans now regard their homesas a source of worry and dashed expectations. How did everything gohaywire? And what can we do about it now? In The Rise and Fall of the U.S. Mortgage and CreditMarkets, renowned finance expert James Barth offers acomprehensive examination of the mortgage meltdown. Together with ateam of economists at the Milken Institute, he explores the shockwaves that have rippled through the entire financial sector and thereal economy. Deploying an incredibly detailed and extensive set ofdata, the book offers in-depth analysis of the mortgage meltdownand the resulting worldwide financial crisis. This authoritativevolume explores what went wrong in every critical area, includingsecuritization, loan origination practices, regulation andsupervision, Fannie Mae and Freddie Mac, leverage and accountingpractices, and of course, the rating agencies. The authors explainthe steps the government has taken to address the crisis thus far,arguing that we have yet to address the larger issues. Offers a comprehensive examination of the mortgage marketmeltdown and its reverberations throughout the financial sector andthe real economy Explores several important issues that policymakers mustaddress in any future reshaping of financial marketregulations Addresses how we can begin to move forward and prevent similarcrises from shaking the foundations of our financial system The Rise and Fall of the U.S. Mortgage and Credit Marketsanalyzes the factors that should drive reform and explores theissues that policymakers must confront in any future reshaping offinancial market regulations.

Fixing the Housing Market

Financial Innovations for the Future

Author: Franklin Allen,James R. Barth,Glenn Yago

Publisher: Pearson Prentice Hall

ISBN: 0137011601

Category: Business & Economics

Page: 195

View: 2926

Explains the financial history leading to the mortgage meltdown and assesses today's housing finance systems in the United States and abroad.

Plunder and Blunder

The Rise and Fall of the Bubble Economy

Author: Dean Baker

Publisher: ReadHowYouWant.com

ISBN: 1459626303

Category: Business & Economics

Page: 200

View: 7388

Plunder and Blunder chronicles the growth and collapse of the stock and housing bubbles, explains how policy changes since 1980 laid the groundwork for catastrophic - but completely predictable - market meltdowns, and offers prescriptions for avoiding these disasters in the future. Dean Baker argues not only that competent economists should have recognized the developing housing bubble, but also that policy makers and the media cheerfully neglected those economists who did predict danger. Baker doesn't engage in 20 - 20 hindsight, but thoroughly documents how fundamental policy shifts destabilized the economy and eroded the broad prosperity of the post - war period. His expert analysis explains the outcomes clearly so we can prevent similar financial disasters. ''Dean Baker warned us what was coming. Now we can read why Dean got it right when so many experts were blind. The story is intriguing - and deeply disturbing.'' - William Greider, national affairs correspondent, The Nation, and author of Come Home, America

Lessons from the Financial Crisis

Causes, Consequences, and Our Economic Future

Author: Robert W. Kolb

Publisher: John Wiley & Sons

ISBN: 9780470622414

Category: Business & Economics

Page: 667

View: 9855

The world's best financial minds help us understand today's financial crisis With so much information saturating the market for the everyday investor, trying to understand why the economic crisis happened and what needs to be done to fix it can be daunting. There is a real need, and demand, from both investors and the financial community to obtain answers as to what really happened and why. Lessons from the Financial Crisis brings together the leading minds in the worlds of finance and academia to dissect the crisis. Divided into three comprehensive sections-The Subprime Crisis; The Global Financial Crisis; and Law, Regulation, the Financial Crisis, and The Future-this book puts the events that have transpired in perspective, and offers valuable insights into what we must do to avoid future missteps. Each section is comprised of chapters written by experienced contributors, each with his or her own point of view, research, and conclusions Examines the market collapse in detail and explores safeguards to stop future crises Encompasses the most up-to-date analysis from today's leading financial minds We currently face a serious economic crisis, but in understanding it, we can overcome the challenges it presents. This well-rounded resource offers the best chance to get through the current situation and learn from our mistakes.

Guaranteed to Fail

Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance

Author: Viral V. Acharya,Matthew Richardson,Stijn van Nieuwerburgh,Lawrence J. White

Publisher: Princeton University Press

ISBN: 9781400838097

Category: Business & Economics

Page: 232

View: 5621

The financial collapse of Fannie Mae and Freddie Mac in 2008 led to one of the most sweeping government interventions in private financial markets in history. The bailout has already cost American taxpayers close to $150 billion, and substantially more will be needed. The U.S. economy--and by extension, the global financial system--has a lot riding on Fannie and Freddie. They cannot fail, yet that is precisely what these mortgage giants are guaranteed to do. How can we limit the damage to our economy, and avoid making the same mistakes in the future? Guaranteed to Fail explains how poorly designed government guarantees for Fannie Mae and Freddie Mac led to the debacle of mortgage finance in the United States, weighs different reform proposals, and provides sensible, practical recommendations. Despite repeated calls for tougher action, Washington has expanded the scope of its guarantees to Fannie and Freddie, fueling more and more housing and mortgages all across the economy--and putting all of us at risk. This book unravels the dizzyingly immense, highly interconnected businesses of Fannie and Freddie. It proposes a unique model of reform that emphasizes public-private partnership, one that can serve as a blueprint for better organizing and managing government-sponsored enterprises like Fannie Mae and Freddie Mac. In doing so, Guaranteed to Fail strikes a cautionary note about excessive government intervention in markets.

Makers and Takers

How Wall Street Destroyed Main Street

Author: Rana Foroohar

Publisher: Crown Business

ISBN: 0553447254

Category: Business & Economics

Page: 400

View: 1628

Eight years on from the biggest market meltdown since the Great Depression, the key lessons of the crisis of 2008 still remain unlearned-and our financial system is just as vulnerable as ever. Many of us know that our government failed to fix the banking system after the subprime mortgage crisis. But what few of us realize is how the misguided financial practices and philosophies that nearly toppled the global financial system have come to infiltrate ALL American businesses,a putting us on a collision course for another cataclysmic meltdown. Drawing on in-depth reporting and exclusive interviews at the highest rungs of Wall Street and Washington, Timeassistant managing editor and economic columnist Rana Foroohar shows how the ofinancialization of Americao - the trend by which finance and its way of thinking have come to reign supreme - is perpetuating Wall Street's reign over Main Street, widening the gap between rich and poor, and threatening the future of the American Dream. Policy makers get caught up in the details of regulating oToo Big To Failo banks, but the problems in our market system go much broader and deeper than that. Consider that- A Thanks to 40 years of policy changes and bad decisions, only about 15 % of all the money in our market system actually ends up in the real economy - the rest stays within the closed loop of finance itself. A The financial sector takes a quarter of all corporate profits in this country while creating only 4 % of American jobs. A The tax code continues to favor debt over equity, making it easier for companies to hoard cash overseas rather than reinvest it on our shores. A Our biggest and most profitable corporations are investing more money in stock buybacks than in research and innovation. A And, still, the majority of the financial regulations promised after the 2008 meltdown have yet come to pass, thanks to cozy relationship between our lawmakers and the country's wealthiest financiers.a a a a Exploring these forces, which have have led American businesses to favor balancing-sheet engineering over the actual kind and the pursuit of short-term corporate profits over job creation, Foroohar shows how financialization has so gravely harmed our society, and why reversing this trend is of grave importance to us all. Through colorful stories of both "Takerso and "Makers,o she'll reveal how we change the system for a better and more sustainable shared economic future.a - Financial Times - Best Books of 2016- Economics - Bloomberg Businessweek- Best Books of the Year

The Public Nature of Private Property

Author: Professor Michael Diamond,Professor Robin Paul Malloy

Publisher: Ashgate Publishing, Ltd.

ISBN: 1409497682

Category: Law

Page: 274

View: 2907

What, exactly, is private property? Or, to ask the question another way, what rights to intrude does the public have in what is generally accepted as private property? The answer, perhaps surprisingly to some, is that the public has not only a significant interest in regulating the use of private property but also in defining it, and establishing its contour and texture. In The Public Nature of Private Property, therefore, scholars from the United States and the United Kingdom challenge traditional conceptions of private property while presenting a range of views on both the meaning of private property, and on the ability, some might say the requirement, of the state to regulate it.

Global Financial Contagion

Building a Resilient World Economy After the Subprime Crisis

Author: Shalendra D. Sharma

Publisher: Cambridge University Press

ISBN: 1107027209

Category: Business & Economics

Page: 406

View: 2582

This book is an authoritative account of the economic and political roots of the 2008 financial crisis. It examines why it was triggered in the United States, why it morphed into the Great Recession, and why the contagion spread with such ferocity around the globe. It also examines how and why economies - including the Eurozone, Russia, China, India, East Asia, and the Middle East - have been impacted and explores their response to the unprecedented challenges of the crisis and the effectiveness of their policy measures. Global Financial Contagion specifically looks at how the Obama administration's policy missteps have contributed to America's huge debt and slow recovery, why the Eurozone's response to its existential crisis has become a never-ending saga, and why the G-20's efforts to create a new international financial architecture may fall short. This book will long be regarded as the standard account of the crisis and its aftermath.

Financing the Future

Market-Based Innovations for Growth

Author: Franklin Allen,Glenn Yago

Publisher: Pearson Prentice Hall

ISBN: 9780137083312

Category: Business & Economics

Page: 256

View: 1523

Financial innovation can drive social, economic, and environmental change, transforming ideas into new technologies, industries, and jobs. But when it is misunderstood or mismanaged, the consequences can be severe. In this practical, accessible book, two leading experts explain how sophisticated capital structures can enable companies and individuals to raise funding in larger amounts for longer terms and at lower cost—accomplishing tasks that would otherwise be impossible. The authors recount the history and basic principles of financial innovation, showing how new instruments have evolved, and how they have been used and misused. They thoroughly demystify complex capital structures, offering a practical toolbox for entrepreneurs, corporate executives, and policymakers. Financing the Future presents clear, thorough discussions of the current role of financial innovation in capitalizing businesses, industries, breakthrough technologies, housing solutions, medical treatments, and environmental projects. It also presents a full chapter of lessons learned: essential insights for stabilizing the economy and avoiding pitfalls. Distinguishing genuine innovation from dangerous copycats Crafting sustainable financial innovations that add value and manage risk The best tools for the job: choosing them, customizing them, using them Selecting the right instruments and structures, and making the most of them Financial innovations for business, housing, and medical research Finding new and better ways to promote entrepreneurship and advance social goals Innovating to save the planet and help humanity The power of finance to protect natural resources and alleviate global poverty This is the first in a new series of books on financial innovation, published through a collaboration between Wharton School Publishing and the Milken Institute. Future titles will focus on specific policy areas such as housing and medical research. The Milken Institute is an independent economic think tank whose mission is to improve the lives and economic conditions of diverse populations in the United States and around the world by helping business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity. It puts research to work with the goal of revitalizing regions and finding new ways to generate capital for people with original ideas.

Enron

The Rise and Fall

Author: Loren Fox

Publisher: John Wiley & Sons

ISBN: 0471432202

Category: Business & Economics

Page: 384

View: 3595

"I'd say you were a carnival barker, except that wouldn't be fair tocarnival barkers. A carnie will at least tell you up front that he's running a shell game. You, Mr. Lay, were running what purported to be the seventh largest corporation in America."-Senator Peter Fitzgerald (R-IL) to Enron CEO Kenneth Lay, Senate Commerce Science & Transportation's Subcommittee, Hearing on Enron, 2/12/02 The speed of Enron's rise and fall is truly astonishing and perhaps the single most important story of corporate failure in the twenty-first century. In Enron investigative journalist Loren Fox promises readers nothing short of the most compelling and insightful investigation into Enron's meteoric ascent-regarded by Wall Street and the media as the epitome of innovation-and its spectacular fall from grace. In a lively and authoritative manner, Fox discusses how the biggest corporate bankruptcy in American business history happened, why for so long no one (except for an enlightened few) saw it coming, and what its impact will be on financial markets, the U.S. economy, U.S. energy policy, and the public for years to come. With access to many company insiders, Fox's intriguing account of this corporate debacle also provides an overview of the corporate culture and business model that led to Enron's high-flying success and disastrous failure. The story of Enron is one that will reverberate in global financial and energy markets as well as in criminal and civil courts for years to come. Rife with all the elements of a classic thriller-scandal, dishonest accounting, personal greed, questionable campaign contributions, suicide-Enron captures the essence of a company that went too far too fast.

Shaky Ground

The Strange Saga of the U.S. Mortgage Giants

Author: Bethany McLean

Publisher: N.A

ISBN: 9780990976301

Category: Business & Economics

Page: 159

View: 1530

In a way, the situation is ironic: housing was at the root of the financial crisis, and six years after the meltdown, housing finance is still the greatest unsolved issue. The U.S. housing market is roughly $10 trillion, making it one of the largest segments of the bond market. Roughly 70 percent of the American population has a mortgage, and for most people, the mortgage is the most important financial instrument in their lives. But until the financial crisis, few people knew the essential role that Fannie Mae and Freddie Mac play in their mortgages. Given the $188 billion government bailout of the two firms the most expensive bailout in history the politics surrounding housing are worse than they've ever been, and the two gigantic firms sit in limbo. Best-selling investigative journalist Bethany McLean, the coauthor of The Smartest Guys in the Room andAll the Devils Are Here, explains why the situation is dangerous and unsustainable, and proposes a few solutions from the perfect, but politically unfeasible to the doable, but ugly.

The Mortgage Wars: Inside Fannie Mae, Big-Money Politics, and the Collapse of the American Dream

Author: Timothy Howard

Publisher: McGraw Hill Professional

ISBN: 0071821090

Category: Business & Economics

Page: 288

View: 8504

"The former Fannie Mae CFO's inside look at the war between the financial giants and government regulators A provocative true-life thriller about the all-out fight for dominance of the mortgage industry--and how it nearly destroyed the global financial systemMany books have been written about the 2008 financial crisis, but they miss the biggest story of the meltdown: the battle between giant financial companies to dominate the $11 trillion mortgage market that almost destroyed the global financial system. For more than twenty years, until 2004, Timothy Howard was a senior executive at the best known of those companies, Fannie Mae, and he was in the middle of that fight.In The Franchise, Howard explains how seemingly unrelated developments in banking regulation, housing policy, Wall Street financial innovation, and political lobbying all combined to wreak havoc on the American housing market and the world economy.Timothy Howard was Vice Chairman and Chief Financial Officer of Fannie Mae until 2004. Priorto this, he was senior financial economist at Wells Fargo Bank in San Francisco"--

The Law and Practice of Restructuring in the UK and US

Author: Christopher Mallon,Shai Waisman

Publisher: Oxford University Press

ISBN: 0199583773

Category: Law

Page: 489

View: 2272

The Law and Practice of Restructuring in the UK and US is a practical guide to the restructuring of corporate debt and associated restructuring issues such as employees and pensions, from the perspective of both UK and New York law, the dominant systems of law in the world commercial and financial markets. At a time when many companies are looking at renegotiating and restructuring their debt agreements, this book provides a timely analysis of current techniques and likely developments in the field of corporate restructuring. An expert contributor team from both the US and UK combine their practical experience to cover all aspects of corporate restructuring. Through vivid exposure of the differences between the two jurisdictions, this book considers likely developments in the corporate restructuring landscape, for example the US Chapter 11 paradigm, as well as addressing lessons learned from past issues which are likely to feed into future develompents With coverage of techniques available to both stressed and distressed companies, as well as looking at specialist markets and key stakeholders, The Law and Practice of Restructuring in the UK and US is an invaluable guide for banking, finance and insolvency practitioners and their clients, both financial institutions and companies looking to restructure debt, as well as global accountancy firms and law and business schools worldwide.

Crash of the Titans

Greed, Hubris, the Fall of Merrill Lynch, and the Near-Collapse of Bank of America

Author: Greg Farrell

Publisher: Crown Pub

ISBN: 0307717879

Category: Business & Economics

Page: 512

View: 5281

The intimate, fly-on-the wall tale of the decline and fall of an America icon With one notable exception, the firms that make up what we know as Wall Street have always been part of an inbred, insular culture that most people only vaguely understand. The exception was Merrill Lynch, a firm that revolutionized the stock market by bringing Wall Street to Main Street, setting up offices in far-flung cities and towns long ignored by the giants of finance. With its “thundering herd” of financial advisers, perhaps no other business, whether in financial services or elsewhere, so epitomized the American spirit. Merrill Lynch was not only “bullish on America,” it was a big reason why so many average Americans were able to grow wealthy by investing in the stock market. Merrill Lynch was an icon. Its sudden decline, collapse, and sale to Bank of America was a shock. How did it happen? Why did it happen? And what does this story of greed, hubris, and incompetence tell us about the culture of Wall Street that continues to this day even though it came close to destroying the American economy? A culture in which the CEO of a firm losing $28 billion pushes hard to be paid a $25 million bonus. A culture in which two Merrill Lynch executives are guaranteed bonuses of $30 million and $40 million for four months’ work, even while the firm is struggling to reduce its losses by firing thousands of employees. Based on unparalleled sources at both Merrill Lynch and Bank of America, Greg Farrell’s Crash of the Titans is a Shakespearean saga of three flawed masters of the universe. E. Stanley O’Neal, whose inspiring rise from the segregated South to the corner office of Merrill Lynch—where he engineered a successful turnaround—was undone by his belief that a smooth-talking salesman could handle one of the most difficult jobs on Wall Street. Because he enjoyed O’Neal’s support, this executive was allowed to build up an astonishing $30 billion position in CDOs on the firm’s balance sheet, at a time when all other Wall Street firms were desperately trying to exit the business. After O’Neal comes John Thain, the cerebral, MIT-educated technocrat whose rescue of the New York Stock Exchange earned him the nickname “Super Thain.” He was hired to save Merrill Lynch in late 2007, but his belief that the markets would rebound led him to underestimate the depth of Merrill’s problems. Finally, we meet Bank of America CEO Ken Lewis, a street fighter raised barely above the poverty line in rural Georgia, whose “my way or the highway” management style suffers fools more easily than potential rivals, and who made a $50 billion commitment over a September weekend to buy a business he really didn’t understand, thus jeopardizing his own institution. The merger itself turns out to be a bizarre combination of cultures that blend like oil and water, where slick Wall Street bankers suddenly find themselves reporting to a cast of characters straight out of the Beverly Hillbillies. BofA’s inbred culture, which perceived New York banks its enemies, was based on loyalty and a good-ol’-boy network in which competence played second fiddle to blind obedience. Crash of the Titans is a financial thriller that puts you in the theater as the historic events of the financial crisis unfold and people responsible for billion of dollars of other people’s money gamble recklessly to enhance their power and their paychecks or to save their own skins. Its wealth of never-before-revealed information and focus on two icons of corporate America make it the book that puts together all the pieces of the Wall Street disaster. From the Hardcover edition.

Governance of Global Financial Markets

The Law, the Economics, the Politics

Author: Emilios Avgouleas

Publisher: Cambridge University Press

ISBN: 0521762669

Category: Business & Economics

Page: 477

View: 4380

Analyses governance structures for international finance, evaluates current regulatory reforms and proposes a new governance system for global financial markets.

IMF Survey

Author: International Monetary Fund

Publisher: International Monetary Fund

ISBN: 1455256668

Category: Business & Economics

Page: 286

View: 3824

Global market turmoil; Strauss-Kahn to head IMF; Global warming; Europe: Financial integration; Islamic finance; Emerging market vulnerability; Subprime turmoil: Lessons; Maghreb integration; Oil producers: Fiscal management; News briefs.

The Rise and Fall of Money Manager Capitalism

Minsky's half century from world war two to the great recession

Author: Eric Tymoigne,L. Randall Wray

Publisher: Routledge

ISBN: 1135076650

Category: Business & Economics

Page: 300

View: 3644

The book studies the trends that led to the worst financial crisis since the Great Depression, as well as the unfolding of the crisis, in order to provide policy recommendations to improve financial stability. The book starts with changes in monetary policy and income distribution from the 1970s. These changes profoundly modified the foundations of economic growth in the US by destroying the commitment banking model and by decreasing the earning power of households whose consumption has been at the core of the growth process. The main themes of the book are the changes in the financial structure and income distribution, the collapse of the Ponzi process in 2007, and actual and prospective policy responses. The objective is to show that Minsky’s approach can be used to understand the making and unfolding of the crisis and to draw some policy implications to improve financial stability.

The American Mortgage System

Crisis and Reform

Author: Susan M. Wachter,Marvin M. Smith

Publisher: University of Pennsylvania Press

ISBN: 0812204301

Category: Business & Economics

Page: 400

View: 9428

Successful home ownership requires the availability of appropriate mortgage products. In the years leading up to the collapse of the housing market, home buyers frequently accepted mortgages that were not only wrong for them but catastrophic for the economy as a whole. When the housing market bubble burst, so did a cornerstone of the American dream for many families. Restoring the promise of this dream requires an unflinching inspection of lending institutions and the right tools to repair the structures that support solid home purchases. The American Mortgage System: Crisis and Reform focuses on the causes of the housing market collapse and proposes solutions to prevent another rash of foreclosures. Edited by two leaders in the field of real estate and finance, Susan M. Wachter and Marvin M. Smith, The American Mortgage System examines key elements of the mortgage meltdown. The volume's contributors address the influence of the Community Reinvestment Act, which is often blamed for the crisis. They uncover how the government-sponsored enterprises Fannie Mae and Freddie Mac invested outside the housing market with disastrous results. They present surprising information about low-income borrowers and the strengths of local banks. This collection of thoughtful studies includes extensive analysis of loan practices and the creation of unstable mortgage securities, presenting data largely unavailable until now. More than a critique, The American Mortgage System offers solutions to the problems facing the future of American home ownership, including identifying asset price bubbles, calculating risk, and preventing discrimination in lending. Measured yet timely and by turns provocative, The American Mortgage System provides a careful assessment of a troubled but indispensable part of the economic and social structure of the United States. This book is a sound investment for economists, urban planners, and all who shape public policy.

What Fuels the Boom Drives the Bust

Regulation and the Mortgage Crisis

Author: Jihad Dagher,Mr. Ning Fu

Publisher: International Monetary Fund

ISBN: 1463913974

Category: Business & Economics

Page: 57

View: 3782

We show that the lightly regulated non-bank mortgage originators contributed disproportionately to the recent boom-bust housing cycle. Using comprehensive data on mortgage originations, which we aggregate at the county level, we first establish that the market share of these independent non-bank lenders increased in virtually all US counties during the boom. We then exploit the heterogeneity in the market share of independent lenders across counties as of 2005 and show that higher market participation by these lenders is associated with increased foreclosure filing rates at the onset of the housing downturn. We carefully control for counties'' economic, demographic, and housing market characteristics using both parametric and semi-nonparametric methods. We show that this relation between the pre-crisis market share of independents and the rise in foreclosure is more pronounced in less regulated states. The macroeconomic consequences of our findings are significant: we show that the market share of these lenders as of 2005 is also a strong predictor of the severity of the housing downturn and subsequent rise in unemployment. Overall our findings lend support to the view that more stringent regulation could have averted some of the volatility on the housing market during the recent boom-bust episode.