Credit Crisis Summary

[harryh]

Here is a particularly excellent overview of the credit crisis. It doesn't cover everything, but it covers a lot in a pretty easy to understand way.

Highly recommended.

Comments

[monkey1976]

homeboy spells Fannie Mae "Fanny Mae"

[monkey1976]

who is he, btw?

[harryh]

homeboy spells Fannie Mae "Fanny Mae"

Heh, that does make him look kind of dumb doesn't it?

He's an Econ prof at GMU. I got the link from Marginal Revolution which is quite a good blog on economic topics (and also sometimes other random things).

[monkey1976]

ah, good to know. thanks!

[queen_elvis]

♥

[r_transpose_p]

I've been toying with the idea of
"Could we have sustained the demand for housing by increasing the rate of (legal) immigration to the U.S.?"

Anyone have thoughts on this?

(presumably new immigrants would initially rent rather than buy, but some homeowners having trouble with their mortgages would rent their homes out to cover their own assets)

[camiolo]

Thanks. I'm going to share this at work. It's very well written, and seems 99% correct. (The only inaccuracy (stated below) doesn't effect the overall conclusion).

The only problem is the statement "because the houses sold were less valuable than they had been in the past, it reduced the interest payments from the new loans taken out by their new home owners." (Hence creating a negative loan value).

Mostly incorrect. When the foreclosed home is sold, the bank closes that transaction. It may simultaneously open a new transaction with the home purchaser to loan money for the purchase, but this isn't a requirement