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 homes as a source of worry and dashed expectations. How did everything go haywire? And what can we do about it now?

In "The Rise and Fall of the U.S. Mortgage and Credit Markets, " renowned finance expert James Barth offers a comprehensive examination of the mortgage meltdown. Together with a team of economists at the Milken Institute, he explores the shock waves that have rippled through the entire financial sector and the real economy. Deploying an incredibly detailed and extensive set of data, the book offers in-depth analysis of the mortgage meltdown and the resulting worldwide financial crisis. This authoritative volume explores what went wrong in every critical area, including securitization, loan origination practices, regulation and supervision, Fannie Mae and Freddie Mac, leverage and accounting practices, and of course, the rating agencies. The authors explain the 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 market meltdown and its reverberations throughout the financial sector and the real economyExplores several important issues that policymakers must address in any future reshaping of financial market regulationsAddresses how we can begin to move forward and prevent similar crises from shaking the foundations of our financial system

"The Rise and Fall of the U.S. Mortgage and Credit Markets" analyzes the factors that should drive reform and explores the issues that policymakers must confront in any future reshaping of financial market regulations.

A world-renowned economist offers cogent and powerful reflections on one of the great avoidable economic catastrophes of the modern era The economic crisis in Greece is a potential international disaster and one of the most extraordinary monetary and political dramas of our time. The financial woes of this relatively small European nation threaten the long-term viability of the Euro while exposing the flaws in the ideal of continental unity. "Solutions" proposed by Europe's combined leadership have sparked a war of prideful words and stubborn one-upmanship, and they are certain to fail, according to renowned economist James K. Galbraith, because they are designed for failure. It is this hypocrisy that prompted former finance minister Yanis Varoufakis, when Galbraith arrived in Athens as an adviser, to greet him with the words "Welcome to the poisoned chalice." In this fascinating, insightful, and thought-provoking collection of essays-which includes letters and private memos to both American and Greek officials, as well as other previously unpublished material-Galbraith examines the crisis, its causes, its course, and its meaning, as well as the viability of the austerity program imposed on the Greek citizenry. It is a trenchant, deeply felt commentary on what the author calls "economic policy as moral abomination," and an eye-opening analysis of a contemporary Greek tragedy much greater than the tiny economy of the nation itself.

The interconnectedness of communities, organisations, governing bodies, policy and individuals in the field of disaster studies has never been accurately examined or comprehensively modelled. This kind of study is vital for planning policy and emergency responses and assessing individual and community vulnerability, resilience and sustainability as well as mitigation and adaptation to climate change impacts; it therefore deserves attention. Disasters and Social Resilience fills this gap by introducing to the field of disaster studies a fresh methodology and a model for examining and measuring impacts and responses to disasters. Urie Bronfenbrenner's bioecological systems theory, which is used to look at communities holistically, is outlined and illustrated through a series of chapters, guiding the reader from the theory's underpinnings through research illustrations and applications focused on each level of Bronfenbrenner's ecosystems, culminating in an integration chapter. The final chapter provides policy recommendations for local and national government bodies and emergency providers to help individuals and communities prepare and withstand the effects of a range of disasters. This book will be of great interest to scholars and students of disaster and emergency management, disaster readiness and risk reduction (DRR), and to scholars and students of more general climate change and sustainability studies.

This book analyses business cycles synchronization in the Euro Area (EA), one of the 3 criteria that define Optimal Currency Areas (OCAs). Even before its launch, economists questioned whether the EA has what it takes to become an OCA. The onset of the sovereign debt crisis in 2010 confirmed the challenges relating to its construction. But did the EA change over time, and what key drivers may be necessary in the future to strengthen the common currency?

"Robert Shiller is two for two in predicting and identifying bubbles that will burst. This book is a must read for anyone predicting future bubbles or charting the course of recovery from our current difficulties."--Lawrence H. Summers, Harvard University

"The subprime crisis has visited ruin on thousands of Americans, and it threatens the health of the global economy. In this timely and fascinating book, Robert Shiller, an expert on irrational behavior in financial markets, conducts a postmortem. How could so many smart people have been so wrong? Shiller concludes that unchecked financial innovation works poorly in asset markets, and he describes the institutions needed to prevent future bubbles."--Gregory Clark, author of "A Farewell to Alms"

"Reading this exciting book is like watching a skilled surgeon at work. The diagnosis of the subprime mortgage mess is biting in its intensity--the best I have seen--and encompasses the human tragedy as well as the economic and financial crisis. The recommended therapy develops logically from Shiller's analysis and is unique in concept as well as powerful in application. The crystal-clear writing style makes his manifesto a pleasure to read."--Peter L. Bernstein, author of "Capital Ideas: The Improbable Origins of Modern Wall Street" and "Capital Ideas Evolving"

"Robert Shiller is a visionary."--Nassim Nicholas Taleb, author of "The Black Swan: The Impact of the Highly Improbable"

"Rigorous, innovative, and accessible, "The Subprime Solution" is a wonderful book that will appeal to a wide audience. Robert Shiller is uniquely qualified to analyze the recent unprecedented problems in the mortgage and housing markets, and the way theyhave spilled over into the wider credit markets. He has again proven his ability to communicate complex ideas and evidence about financial markets."--Diane Coyle, author of "The Soulful Science"

While most mainstream commentators view the crisis that provoked the Great Recession as having passed, these essays from Richard Wolff paint a far less rosy picture. Drawing attention to the extreme downturn in most of capitalism's old centres, the unequal growth in its new centres and the resurgence of a global speculative bubble, Wolff - in his uniquely accessible style - makes the case that the crisis should be grasped not as a passing moment, but as an evolving stage in capitalism's history.

Praise for Endgame "This is an extremely powerful, sobering, well-written and highly accessible book. It will demonstrate to you why there are no painless solutions to the mounting debt problems around the world something that too many people are yet to realize. It will take you on a well-documented journey through the debt supercycle, making stops around the world and at critical junctures. And it is a must-read for anyone wishing to understand the global debt dynamics and ways to protect against its bad consequences." Mohamed A. El-Erian, CEO, PIMCO, and author of When Markets Collide "No one has thought more creatively about the economy. Mauldin's weekly newsletter is a must-read, and his book is even more important if you want to understand a rapidly changing world." Newt Gingrich, Former Speaker of the House of Representatives "Successful investors explore all possibilities. You should read this book so you can succeed in case the Endgame is our future." Jim Rogers, author of A Gift to My Children "I read everything John Mauldin writes. He travels the world and shares his financial stories like a good friend sharing a drink. Mauldin is that rarity a skeptical optimist who calls 'em straight and rewards his clients and fans." Rich Karlgaard, Publisher and Columnist, Forbes magazine "There's clearly something important going on in the world economy. Something big. Something powerful and dangerous. But something as yet undefined and uncertain. We are all feeling our way around in the dark, trying to figure out what it is. John Mauldin must have night vision glasses. He does an excellent job of seeing the obstacles. You should read this book before you knock over a lamp and stumble over the furniture." William Bonner, President and CEO, Agora Inc., and author of Dice Have No Memory and Empire of Debt "Endgame is not only a highly readable and informative account of the causes of the recent global economic and financial meltdown, but it also provides investors with a concrete investment strategy from which they can benefit while this final act in financial history is being played out." Marc Faber, Managing Director, Marc Faber, Ltd., and Editor, Gloom, Boom & Doom Report

Financial crises have become an all too common occurrence over the past twenty years, largely as a result of changes in finance brought about by increasing internationalization and integration. As domestic financial systems and economies have become more interlinked, weaknesses can significantly impact not only individual economies but also markets, financial intermediaries, and economies around the world. This volume addresses the twin objectives of financial development in the context of financial stability and the role of law in supporting both. Financial stability (frequently seen as the avoidance of financial crisis) has become an objective of both the international financial architecture and individual economies and central banks. At the same time, financial development is now seen to play an important role in economic growth. In both financial stability and financial development, law and related institutions have a central role.

This book examines the political roots of banking crises in Spain. It focuses on the process of political bargains in which parties with different interests come together to form coalitions, and it shows how these coalitions have determined banking outcomes and caused banking crises in Spain. In particular, it analyzes the 2008 Spanish banking crisis and shows how Spanish banks and related savings institutions contributed significantly to the challenges that led to the crisis, including the fueling of a large property bubble - by channeling tremendous credits to the construction and real estate sectors, while starving the country's productive sectors. Accordingly, the book links banking crises to the country's larger institutional malaise, placing the solution not only in the hands of the banks, but also the political institutions that influence them.

This global handbook provides an up-to-date and comprehensive overview of shadow banking, or market-based finance as it has been recently coined. Engaging in financial intermediary services outside of normal regulatory parameters, the shadow banking sector was arguably a critical factor in causing the 2007-2009 financial crisis. This volume focuses specifically on shadow banking activities, risk, policy and regulatory issues. It evaluates the nexus between policy design and regulatory output around the world, paying attention to the concept of risk in all its dimensions-the legal, financial, market, economic and monetary perspectives. Particular attention is given to spillover risk, contagion risk and systemic risk and their positioning and relevance in shadow banking activities. Newly introduced and incoming policies are evaluated in detail, as well as how risk is managed, observed and assessed, and how new regulation can potentially create new sources of risk. Volume I concludes with analysis of what will and still needs to happen in the event of another crisis. Proposing innovative suggestions for improvement, including a novel Pigovian tax to tame financial and systemic risks, this handbook is a must-read for professionals and policy-makers within the banking sector, as well as those researching economics and finance.

The global financial crisis of 2008 ushered in a system of informal decision-making in the grey zone between economics and politics. Legitimized by a rhetoric of emergency, ad hoc bodies have usurped democratically elected governments. In line with the neoliberal credo, the recent crisis has been used to realize the politically impossible and to re-align executive power with the interests of the finance industry. In this important book, Joseph Vogl offers a much longer perspective on these developments, showing how the dynamics of modern finance capitalism have always rested on a complex and constantly evolving relationship between private creditors and the state. Combining historical and theoretical analysis, Vogl argues that over the last three centuries, finance has become a "fourth estate," marked by the systematic interconnection of treasury and finance, of political and private economic interests. Against this historical background, Vogl explores the latest phase in the financialization of government, namely the dramatic transfer of power from states to markets in the latter half of the 20th century. From the liberalization of credit and capital markets to the privatization of social security, he shows how policy has actively enabled a restructuring of the economy around the financial sector. Political systems are "imprisoned" by the regime of finance, while the corporate model suffuses society, enclosing populations in the production of financial capital. The Ascendancy of Finance provides valuable and unsettling insight into the genesis of modern power and where it truly resides.

The European Union is creating a Financial Union with a European Banking Union and a Capital Markets Union in reaction to lessons learned from incomplete financial markets integration, the Global Financial Crisis and European Sovereign Debt Crisis. This book critically analyses these projects for a more integrated, resilient and sustainable financial system at a time when the United Kingdom as the member state with the most developed capital markets and the leading global and European financial center, the City of London, is leaving the Union. Neoliberal financial globalization and markets integration policies have led to finance-led capitalism that caused the crises. By building on pre-crises integration ideas, the Union revives and expands the reach of capital markets-based financing and shadow banking. The book discusses the consequences of deeper integration and the future of European financial centers advocating an alternative financial markets integration based on theories explaining finacialization and finance-led capitalism.

'If you are curious about what the financial Goetterdammerung might look like you've certainly come to the right place' Forbes Financial expert, investment advisor and New York Times bestselling author James Rickards reveals how the global elite are darkly concealing a coming catastrophe from investors, whilst protecting themselves from the fallout. ------------------------------------------------------------------------ If you want to plan for the risks ahead, you will need Rickards's cutting-edge synthesis of behavioural economics, history, and complexity theory. It's a guidebook to thinking smarter, acting faster and living with the comfort ing knowledge that your wealth is secure.

Longlisted for the FT and McKinsey Business Book of the Year Award 2015. In September 2008, HBOS, with assets larger than Britain's GDP, was on the edge of bankruptcy. Its collapse would have created the biggest economic crisis since the 1930s and a major political disaster for the Labour government. With the help and support of Gordon Brown, HBOS was rescued by Lloyds TSB, one of the country's strongest banks, in circumstances that have since become the stuff of City legend. In the highly acclaimed Black Horse Ride, veteran financial journalist Ivan Fallon brings together the accounts of all the power players involved in this dramatic saga for the first time, including the key roles played by the Governor of the Bank of England, the Prime Minister and the Treasury. Through a compelling cast of prominent bankers, politicians and investors, Fallon reveals what really occurred in the aftermath of the crash of Lehman Brothers, perhaps the worst single day in banking history.

This book has a dual purpose. First, it analyses the concept of economic crises within economic theory, showing the various theoretical foundations and controversies amongst different schools of economic thought. Second, it presents an empirical analysis of the Great Recession in Spain, addressing the growth period of 1995 to 2007-08, the subsequent depression until 2013-14 and the recovery that followed. It also shows the way in which the inner contradictions of capital manifests itself in an European peripheral economy under a real estate bubble, emphasizing the role of the Spanish economy in European capitalism. This theoretical and empirical heterodox approach will be of interest to students and scholars in political economy, and those with an interest in the Eurozone.

The bankruptcy of the investment bank Lehman Brothers was the pivotal event of the 2008 financial crisis and the Great Recession that followed. Ever since the bankruptcy, there has been heated debate about why the Federal Reserve did not rescue Lehman in the same way it rescued other financial institutions, such as Bear Stearns and AIG. The Fed's leaders from that time, especially former Chairman Ben Bernanke, have strongly asserted that they lacked the legal authority to save Lehman because it did not have adequate collateral for the loan it needed to survive. Based on a meticulous four-year study of the Lehman case, The Fed and Lehman Brothers debunks the official narrative of the crisis. It shows that in reality, the Fed could have rescued Lehman but officials chose not to because of political pressures and because they underestimated the damage that the bankruptcy would do to the economy. The compelling story of the Lehman collapse will interest anyone who cares about what caused the financial crisis, whether the leaders of the Federal Reserve have given accurate accounts of their actions, and how the Fed can prevent future financial disasters.

This book aims to unpack the complex economic relationships between law, asset price bubbles and financial regulation. The failure to thoroughly understand these interactions has had severe consequences, as law has proven ill-equipped to prevent or mitigate financial crises caused by bubbles. Bubbles represent prolonged, but unsustainable booms in the price of assets, such as securities or real estate. They form due to herd behavior by investors and other economic feedback loops. These same feedback loops render financial regulations designed for normal market conditions ineffective or counterproductive.

Unpacking the interactions of bubbles and law reveals common threads among the epidemic of financial fraud in the Enron era, the subprime crisis, and previous financial crises throughout the world. A systematic examination of these interactions points to reforms for making regulation more effective and markets more stable.

This book is an extension of the author's last book (Crisis and Sustainability: The Delusion of Free Markets, Palgrave Macmillan, 2017) and sheds light on the evolution of the financial system after the 2007/08 crisis and on changes and developments in the regulatory framework that have taken place concurrently over the last ten years. The book's central theme addresses the neoliberal philosophy of financial regulation and, in particular, the role of self-regulating markets in the finance sector and how this has affected incentives and behaviour within the finance sector. The author contends that neoliberal maxims have led us to believe that market-based finance is superior to, and safer than, a more rules-based regulatory regime for the sector, and then explains that experience suggests otherwise. The huge expansion of 'financialization' in the developed economies over the last two decades has greatly magnified the risks emanating from the impact of highly leveraged, risk averse, under-regulated finance on other sectors of these economies. The author concludes that financial institutions need to be encouraged to operate within a more socially responsible matrix that facilitates and promotes long-term economic growth coupled with social stability.

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 global financial crisis triggered severe shocks for developing countries, whose embrace of greater commercial and financial openness has increased their exposure to external shocks, both real and financial. This new edition of Development Macroeconomics has been fully revised to address the more open and less stable environment in which developing countries operate today. Describing the latest advances in this rapidly changing field, the book features expanded coverage of public debt and the management of capital inflows as well as new material on fiscal discipline, monetary policy regimes, currency, banking and sovereign debt crises, currency unions, and the choice of an exchange-rate regime. A new chapter on dynamic stochastic general equilibrium (DSGE) models with financial frictions has been added to reflect how the financial crisis has reshaped our thinking on the role of such frictions in generating and propagating real and financial shocks. The book also discusses the role of macroprudential regulation, both independently and through its interactions with monetary policy, in preserving financial and macroeconomic stability. Now in its fourth edition, Development Macroeconomics remains the definitive textbook on the macroeconomics of developing countries. * The most authoritative book on the subject--now fully revised and expanded* Features new material on fiscal discipline, monetary policy regimes, currency, banking and sovereign debt crises, and much more* Comes with online supplements on informal financial markets, stabilization programs, the solution of DSGE models with financial frictions, and exchange rate crises

This book scrutinizes global financial flows and stocks, both financial assets and liabilities and their impact on the global balance of economic power, especially as they affect the largest and fastest-growing countries in both the developed and the developing world. It shows how financial flows can promote economic growth and financial capital can serve as a tool for higher growth rates in emerging market economies, but also that the huge amounts of financial capital currently being spent in advanced countries to promote economic growth has produced at best very modest improvements and in some cases negative results. The book opens with an analysis of global capital flows and their concentration. It then offers an analysis of rates of relative economic growth (or decline). The final section deals with the (decreasing) economic efficiency of financial flows and the (un)sustainability of economic growth, especially during the past eight years of economic recovery. Tackling one of the most serious problems in the global economy today, this book will be of interest to academics, researchers, and students of capital markets, financial crisis, and financial economics.

This book addresses the causes and consequences of the international financial crisis of 2008. A range of esteemed contributors explore developments in the United States, where the crisis of 2008 originated, as well as the smallest country affected, Iceland, by evaluating developments since 2008. Currently, many countries are facing similar problems as Iceland did in 2008: this book is of interest to economists and policy makers in these countries to study what happened in Iceland, and why the recovery of that economy was strong and swift. The chapters in this book originate from panel discussions and conferences and explore areas including regulation, state projects and inflation.

The papers in this proceedings volume were presented at the 9th international conference "The Economies of the Balkan and Eastern European Countries in the Changing World" (EBEEC) held in Athens, Greece, in April 2017. They include the scientific results of research on current issues relevant for the wider area of Eastern Europe. Authors from 30 different countries develop new ideas, covering topics such as international economies, European integration, the economic crisis, macroeconomics, banking, stock markets, education, energy, innovation, and marketing. The contributions also examine the role of the economies of the Balkan and Eastern European countries in a pan-European context.