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Morris mentions this fundamental aspect only briefly, with very little detail and more than a hint of contempt. Husock saw it all coming before the year 2000, when he wrote in "City Journal," the Manhattan Institute's online journal: "The Clinton administration has turned the Community Reinvestment Act.into one of the most powerful mandates shaping American cities--and.a vast extortion scheme against the nation's banks." Read Husock's article at city-journal dot org if you wish to really get to the bottom of the disaster and learn who the perpetrators are. A decades-long series of flawed federal policies and activism by leftist community organizers such as corrupt ACORN essentially coerced banks into lending to shaky borrowers, who not infrequently provided inadequate or outright fraudulent financial statements.
Though Morris' writing style is lucid, he packs the book with sufficient technical-financial jargon and concepts to make this a bit of a difficult read. The leveraged mortgage instruments and the institutions behind them became worthless because an inconceivable number of mortgages were predestined to go bad. I can't share the enthusiasm of the other readers.
The subprime home buyers couldn't continue to pay because they were underqualified to get the loans -- often at 100% financing -- in the first place. If he has his head in the sand regarding the essence of the crisis, what should I think of his book. His main contribution is to paint Wall Street people and institutions as overly eager to invent new, highly leveraged investment strategies which allowed them to reap large, up-front profits and to pass on the risk to somebody else.But the Wall Street earthquake is only the secondary reason for the global financial debacle.
The primary reason was federal housing policy, exposed as risky ideology years ago by many critics including Harvard professor and Manhattan Institute scholar Howard Husock ("America's Trillion-Dollar Housing Mistake," 2003).
However the book deserves no less than 4 stars for the way it was written. He makes references to the fact that between the recent write downs and defaults of residential mortgages, corporate debt, credit card debt, and bonds the total debt will be about $1 trillion however given the fact that this book was written before the Lehman and Bear fiascos the grand total should be well above those figures. Also he doesn't give us an idea as to how this is going to end but concludes it by saying some kind of regulation will be in place. Terrific work going back and explaining the subprime mortgage crisis. Very well and professionally done. You already need to have a base knowledge about the mortgage industry, the driving factors behind the crisis to get a good feel for this book. Though I will warn you, this isn't one of those for the Average Joe. The Author goes back to the 1970's to understand the mortgage crisis that happened in 2007-2008.
Kennedy forwards. I must say the author moves a bit quickly through the various acronyms such as CDO's, collaterallized debt obligations and the like leaving me a bit confused as to how these people could sell "products" that existed almost independently from the underlying assets such that if the value of the actual asset fell slightly, the "product" became virtually worthless.
Only a very safe, non-risky mutual fund would seem to protect the average investor from the ineptitude and arrogance of the Wall Street insiders. I came away feeling that anyone who invests in the stock market or bond market independently is a fool.
I must caution anyone who wants to read this book; this book will piss you off. He describes in some detail the financial "products" developed by the wave of mathemeticians who stormed the financial palace gates and which created our current financial mess.
Anything marked higher risk would seem to me to be a euphemism for what the author calls "Toxic waste", the assets the large brokerage firms don't want to carry and delight in passing off to schmucks like me.So Caveat emptor. The author provides the background of the financial landscape from the Presidency of John F.
He throws in the various financial scams and scandals that presaged our current mess and shows their connection to what came ahead.
L. The fact that this new book was composed in late 2007 speaks volumes for Morris's prescient insight into financial matters. What a gift to the general reader. Charles R. Kistner, Atlanta Wallace Stevens was a highly respected insurance claims man and Morris is a banker. Morris is one of kind. Go figure.Having read Morris' "American Catholic", a surprise literary tour de force, I went on to read his Money, Greed, and Risk - Why Financial Markets Crash" and "The Tycoons".
Since I already had a pretty good idea of what caused the crisis, I found it very valuable to read about different schools of economy and how they played a role in the situation. He believes that now is the time for the government to intervene much more to create prosperity in the future.
- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market. I enjoyed reading this book.
I think this book one of the easiest to read on the subject. However, he acknowledges that this philosophy was the major contributor to prosperity since the 1970s.
Learn how to invest your money, how to pick stocks, and how to make money in the stock market The author explains the origins of financial instruments such as credit default swaps, and most importantly, how they contributed to the financial meltdown.
He argues that the Chicago School of Economics which is based on free market with little regulation failed miserably.
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