cover image: Who could have seen THAT coming?

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Who could have seen THAT coming?

11 May 2010

But few recognize the history of the social underpinnings of the market and fewer still appreciate that it was not simply unscrupulous lending practices that triggered the crisis, but the inappropriate ratings accorded mortgage-backed securities and ultimately the creation of improperly secured debt swap instruments by some of the most reputable Wall Street firms. [...] With the release of marginally positive data for the fourth quarter of 2009, the United Kingdom was the last of the developed economies to register a return to growth. [...] So one of the world’s more traumatic financial/economic episodes has begun to drift from its pinnacle at the head of the nightly news and lapse into the arcane world of the academic theoreticians and the obscure domain of domestic and international regulators. [...] Their business model involved the purchase of home mortgages (in the case of Fannie Mae chiefly from issuing banks and in the case of Freddie Mac chiefly from issuing thrift institutions) and the bundling of those mortgages into securities that carried the explicit guarantee of the agency. [...] That, for many, signaled the point of greatest virulence of the financial crisis and the trigger point of the recession.
government politics economy recession international finance banking banks business debt economic policy recessions financial services industry investments law mortgages securities investors bank mortgage government budget credit rating agency credit default swap global financial crisis, 2008-2009 loan market fannie mae freddie mac canada mortgage and housing corporation credit (finance) collateralized debt obligation sub-prime alan greenspan

Authors

McIver, Don

Pages
40
Published in
Canada

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