How We Were Ruined & What We Can Do
By Jeff Madrick
New York Review of Books
The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
by Charles R. Morris
PublicAffairs, 194 pp., $22.95
Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis
by Mark Zandi
FT Press, 270 pp., $24.99
The Reckoning
a series of articles by Gretchen Morgenson et al.
The New York Times, September 28–December 28, 2008
Some prominent figures in the financial markets insist that unchecked opportunism by financiers was not a root cause of the current credit crisis. Robert Rubin, the former Treasury secretary who has just resigned as a high-level adviser and director at Citigroup, told The Wall Street Journal in November that the near collapse of Citigroup, which was bailed out by the federal government, was caused by the "buckling" financial system, and not any mistakes made at his company. "No one anticipated this," said Rubin, who once ran the investment firm Goldman Sachs. Others such as Harvey Golub, former chairman of American Express, maintain that the fault lies principally with the federal government, which since the 1990s and even earlier has been actively promoting mortgages for low-income Americans. This, he argues, led to the unsustainable frenzy of sub-prime mortgages in the 2000s.
Charles Morris's informed and unusual book, The Trillion Dollar Meltdown, provides a decisive rebuttal to all such excuse-making and blame of "government." Morris makes it clear that it was an unquenchable thirst for easy profits that led commercial and investment banks in the US and around the world—as well as hedge funds, insurance companies, private equity firms, and other financial institutions—to take unjustifiable risks for their own gain, and in so doing jeopardize the future of the nation's credit system and now the economy itself. In fact, government-sponsored entities, Fannie Mae and Freddie Mac, did have a part in the crisis, but not because they were principally trying to help the poor buy homes. Rather, they were also trying to maximize their profits and justify large salaries and bonuses for their executives. They had been made into publicly traded companies in 1989.
(More here.)
New York Review of Books
The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
by Charles R. Morris
PublicAffairs, 194 pp., $22.95
Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis
by Mark Zandi
FT Press, 270 pp., $24.99
The Reckoning
a series of articles by Gretchen Morgenson et al.
The New York Times, September 28–December 28, 2008
Some prominent figures in the financial markets insist that unchecked opportunism by financiers was not a root cause of the current credit crisis. Robert Rubin, the former Treasury secretary who has just resigned as a high-level adviser and director at Citigroup, told The Wall Street Journal in November that the near collapse of Citigroup, which was bailed out by the federal government, was caused by the "buckling" financial system, and not any mistakes made at his company. "No one anticipated this," said Rubin, who once ran the investment firm Goldman Sachs. Others such as Harvey Golub, former chairman of American Express, maintain that the fault lies principally with the federal government, which since the 1990s and even earlier has been actively promoting mortgages for low-income Americans. This, he argues, led to the unsustainable frenzy of sub-prime mortgages in the 2000s.
Charles Morris's informed and unusual book, The Trillion Dollar Meltdown, provides a decisive rebuttal to all such excuse-making and blame of "government." Morris makes it clear that it was an unquenchable thirst for easy profits that led commercial and investment banks in the US and around the world—as well as hedge funds, insurance companies, private equity firms, and other financial institutions—to take unjustifiable risks for their own gain, and in so doing jeopardize the future of the nation's credit system and now the economy itself. In fact, government-sponsored entities, Fannie Mae and Freddie Mac, did have a part in the crisis, but not because they were principally trying to help the poor buy homes. Rather, they were also trying to maximize their profits and justify large salaries and bonuses for their executives. They had been made into publicly traded companies in 1989.
(More here.)
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