Hidden in plain sight : what really caused the world's worst financial crisis and why it could happen again / Peter J. Wallison ; design, Yvonne Tsang.

Format:

Book

Author/Creator:

Wallison, Peter J., author.

Contributor:

Tsang, Yvonne, designer.

Language:

English

Subjects (All):

Housing--Finance--Government policy--United States.

Housing.

Mortgage loans--Government policy--United States.

Mortgage loans.

Subprime mortgage loans--Government policy--United States.

Subprime mortgage loans.

Financial crises--Government policy--United States.

Financial crises.

United States--Economic policy--2001-2009.

United States.

Physical Description:

1 online resource (433 p.)

Edition:

First American edition.

Place of Publication:

New York, New York : Encounter Books, 2015.

Language Note:

English

Summary:

The 2008 financial crisis--like the Great Depression--was a world-historical event. What caused it will be debated for years, if not generations. The conventional narrative is that the financial crisis was caused by Wall Street greed and insufficient regulation of the financial system. That narrative produced the Dodd-Frank Act, the most comprehensive financial-system regulation since the New Deal. There is evidence, however, that the Dodd-Frank Act has slowed the recovery from the recession. If insufficient regulation caused the financial crisis, then the Dodd-Frank Act will never be modified or repealed; proponents will argue that doing so will cause another crisis. A competing narrative about what caused the financial crisis has received little attention. This view, which is accepted by almost all Republicans in Congress and most conservatives, contends that the crisis was caused by government housing policies. This book extensively documents this view. For example, it shows that in June 2008, before the crisis, 56 percent of all US mortgages were subprime or otherwise low-quality. Of these, 76 percent were on the books of government agencies such as Fannie Mae and Freddie Mac. When these mortgages defaulted in 2007 and 2008, they drove down housing prices and weakened banks and other mortgage holders, causing the crisis. After this book is published, no one will be able to claim that the financial crisis was caused by insufficient regulation, or defend Dodd-Frank, without coming to terms with the data this book contains.

Contents:

Introduction

The difference between prime and nontraditional mortgages (NTMS)

Red herrings : other explanations for the crisis

The housing finance market before the affordable housing goals

Government housing policies kick in

The affordable housing goals and the decline in underwriting standards

Force fed : the affordable housing goals, the gses, and the NTMS

Going viral : competition spreads the gses' reduced underwriting standards to the wider market

The great housing bubble

Ignorance and bliss : what was known about the NTM market before the crisis

How 32 million NTMS precipitated a financial crisis

Fair value accounting and collateral damage

Bad to worse : the government response

Conclusion.

Notes:

Includes index.

Description based on print version record.

ISBN:

1-59403-771-X

OCLC:

903956666