14 Simon English, “U.S. Watchdog Under Fire,” The Telegraph, May 20, 2002, http://www.telegraph.co.uk/finance/2763231/US-watchdog-under-fire.html.
15 Arianna Huffington, “The SEC Goes AWOL,” Salon, May 14, 2002, http://archive.salon.com/news/col/huff/2002/05/14/sec/print.html.
16 John McCain, “The Free Market Needs New Rules,” New York Times, July 8, 2002, http://query.nytimes.com/gst/fullpage.html?res=9B00E3D61031F93BA35754C0A9649C8B63
17 Dana Parson, “An Ironic Twist in the Tale of SEC’s Christopher Cox,” Los Angeles Times, January 30, 2009, www.latimes.com/news/local/la-me-parsons30-2009jan30,0,3244574.column.
18 Doug Kass, “Madoff Was Made Up,” TheStreet.com, December 12, 2008, www.thestreet.com/story/10452909/1/kass-madoff-was-made-up.html.
19 Kara Scannell, “Madoff Chasers Dug for Years, to No Avail,” Wall Street Journal , January 5, 2009, http://online.wsj.com/article/SB123111743915052731 .html
20 Congressional testimony of Harry Markopolos before the U.S. House of Representatives Committee on Financial Services, February 4, 2009, http://online.wsj.com/public/resources/documents/MarkopolosTestimony20090203 .pdf
21 Alex Spillius, “Sir Allen Stanford Refuses to Testify in Fraud Probe,” Telegraph, March 12, 2009, www.telegraph.co.uk/finance/4976280/Sir-Allen-Stanford-refuses-to-testify-in-fraud-probe.html.
22 Mara Der Hovanesian, “Nightmare Mortgages,” BusinessWeek, September 11, 2006, www.businessweek.com/magazine/content/06_37/b4000001.htm.
23 Floyd Norris, “Trump Sees Act of God in Recession,” New York Times, December 4, 2008, www.nytimes.com/2008/12/05/business/05norris.html.
24 Tyler Cowen, “So We Thought. But Then Again . . . ,” New York Times, January 13, 2008, www.nytimes.com/2008/01/13/business/13view.html.
25 Aaron Lucchetti and Serena Ng, “How Rating Firms’ Calls Fueled Subprime Mess,” Wall Street Journal, August 15, 2007, http://online.wsj.com/article/SB118714461352698015.html
26 Ibid.
27 Stiglitz, “Economic Crisis.”
28 Testimony of Deven Sharma, president, Standard & Poor’s, remarks before the United States House of Representatives Committee on Oversight and Government Reform, October 22, 2008, http://oversight.house.gov/documents/20081022125052.pdf.
29 Jeffrey McCracken, “Moody’s Aims to Be Ahead on Defaults,” Wall Street Journal , March 10, 2009, http://online.wsj.com/article/SB123664643956778537 .htmlwww.bloomberg.com/apps/news?pid=20601109&sid=ah839IWTLP9s&#.
30 Matthew Haggman, Rob Barry, and Jack Dolan, “Thousands with Criminal Records Work Unlicensed as Loan Originators,” Miami Herald, July 20, 2008, www.miamiherald.com/static/multimedia/news/mortgage/originators.html; also, Jack Dolan, Rob Barry, and Matthew Haggman, “Ex-Convicts Active in Mortgage Fraud,” Miami Herald, July 20, 2008, www.miamiherald.com/static/multimedia/news/mortgage/brokers.html.
31 Brad Linder, “Arizona Bans Zillow from Offering Real Estate Estimates,” April 17, 2007, www.downloadsquad.com/2007/04/17/arizona-bans-zillow-from-offering-real-estate-estimates/.
Chapter 20: Misplaced Fault
1 Roger Lowenstein, “Who Needs the Mortgage-Interest Deduction?” New York Times, March 5, 2006, www.nytimes.com/2006/03/05/magazine/305deduction.1.html.
2 Edward L. Glaeser and Jesse M. Shapiro, “The Benefits of the Home Mortgage Interest Deduction,” Harvard University Discussion Paper 1979, October 2002, http://post.economics.harvard.edu/hier/2002papers/2002list.html.
3 Edward L. Glaeser, “Killing (or Maiming) a Sacred Cow: Home Mortgage Deductions,” Economix, February 24, 2009, http://economix.blogs.nytimes.com/2009/02/24/killing-or-maiming-a-sacred-cow-home-mortgage-deductions/.
4 Kelly Curran, “FDIC’s Bair Sets to Shatter CRA ‘Myth,’ ” December 5, 2008, www.housingwire.com/2008/12/05/fdics-bair-sets-to-shatter-cra-myth/.
5 Daniel Gross, “Subprime Suspects,” Newsweek, October 7, 2008, www.newsweek.com/id/162789.
6 Ibid.
7 Barry Ritholtz, “Misunderstanding Credit and Housing Crises: Blaming the CRA, GSEs,” The Big Picture, October 2, 2008, www.ritholtz. com/blog/2008/10/misunderstanding-credit-and-housing-crises-blaming-the-cra-gses/
8 Ibid.
9 Randall S. Kroszner, “The Enduring Challenge of Concentrated Poverty in America,” remarks at the Confronting Concentrated Poverty Policy Forum, Board of Governors of the Federal Reserve System, December 3, 2008, www.federalreserve.gov/newsevents/speech/kroszner20081203a.htmand www.frbsf.org/cpreport/.
10 Curran, “FDIC’s Bair”; also, Ronald D. Orol, “FDIC: Community Reinvestment Act Is Not Cause of Financial Crisis, FDIC’s Bair Said,” MarketWatch, December 4, 2008, http://tinyurl.com/fdic-cra.
11 Robert Gordon, “Did Liberals Cause the Sub-Prime Crisis?” American Prospect, April 7, 2008, www.prospect.org/cs/articles?article=did_liberals_cause_the_subprime_crisis; also see Aaron Pressman, “Community Reinvestment Act Had Nothing to Do with Subprime Crisis,” BusinessWeek, September 29, 2008, www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html.
12 Jonathan R. Laing, “The Endgame Nears for Fannie and Freddie,” Barron’s, August 18, 2008, http://online.barrons.com/article/SB121884860106946277.html
13 David S. Hilzenrath, “Fannie’s Perilous Pursuit of Subprime Loans,” Washington Post, August 19, 2008, www.washingtonpost.com/wp-dyn/content/article/2008/08/18/AR2008081802111.html.
14 James Tyson, “Former Fannie Mae Executives to Pay $31.4 Million,” Bloomberg, April 18, 2008, www.bloomberg.com/apps/news?pid=20601103&sid=aMxLZLZWyFok&refer=us.
15 Charles Duhigg, “Pressured to Take More Risk, Fannie Reached Tipping Point,” New York Times, October 4, 2008, www.nytimes.com/2008/10/05/business/05fannie.html?_r=1&pagewanted=all.
16 Charles Duhigg, “At Freddie Mac, Chief Discarded Warning Signs,” New York Times, August 5, 2008, www.nytimes.com/2008/08/05/business/05freddie.html.
17 Ibid.
18 “Shocking Video Unearthed Democrats in Their Own Words Covering Up the Fannie Mae, Freddie Mac Scam That Caused Our Economic Crisis,” video posted to NakedEmporerNews and YouTube.com, www.youtube.com/watch?v=_MGT_cSi7Rs.
19 Pete Yost, “AP IMPACT: How Freddie Mac Halted Regulatory Drive,” December 7, 2008, http://seattletimes.nwsource.com/html/politics/2008479535_aptheinfluencegamefreddiemac.html
Chapter 21: The Virtues of Foreclosure
1 “Historically Strong Home Sales Expected in 2006,” NAR Publication, Business Wire, December 12, 2005, www.allbusiness.com/economy-economic-indicators/economic-indicators-existing/5174031-1.html; also, “Historically Strong Home Sales Expected in 2006,” December 15, 2005, http://rodomino.realtor.org/research.nsf/htmlarchives/ResearchUpdate121505.
2 “Greenspan: Housing Market Worst May Be Over,” Reuters, October 9, 2006, www.msnbc.msn.com/id/15198805/; also, “Greenspanity,” Economist.com, August 14, 2008, www.economist.com/blogs/freeexchange/2008/08/greenspanity.cfm.
3 Historical Census of Housing Tables, www.census.gov/hhes/www/housing/census/historic/owner.html.
4 Ibid.
5 S&P/Case-Shiller Home Price Indexes, http://www2.standardandpoors com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0, 0,0,0,0.html.
6 Amy Hoak, “Report: 20% of Home Mortgages Were Underwater,” MarketWatch, March 4, 2009, http://online.wsj.com/article/SB123616863098628705.html
7 Bureau of Labor Statistics, www.bls.gov/ces/.
8 Barry Ritholtz, “Fixing Housing & Finance: 30/20/10 Proposal,” The Big Picture , September 22, 2008, www.ritholtz.com/blog/2008/09/fixing-housing-finance-302010-proposal/;. also,http://makinghomeaffordable.gov/
Chapter 22: Casino Capitalism
1 David Sanger, “Nationalization Gets a New, Serious Look,” New York Times, January 25, 2009, www.nytimes.com/2009/01/26/business/economy/26banks.html.
2 Liam Pleven, “AIG to Pay $450 Million in Bonuses,” Wall Street Journal, March 15, 2009, http://online.wsj.com/article/SB123707854113331281.html
3
Lars Jonung, “Lessons from Swedish Bank Resolution Policy,” Eurointelligence, March 6, 2009, www.eurointelligence.com/article.581+ M50462bfd105.0.html
4 Barry Ritholtz, “Debate over Nationalization Is ‘Semantics,’” The Big Picture, February 23, 2009, www.ritholtz.com/blog/2009/02/debate-over-nationalization-is-semantics/.
5 Alison Vekshin, “AIG’s Liddy Acknowledges ‘Distasteful’ Retention Pay,” Bloomberg, March 18, 2009, www.bloomberg.com/apps/news?pid=newsarchive&sid=aECcRPKYAOx0.
6 Serena Ng, “Hedge Funds May Get AIG Cash,” Wall Street Journal, March 18, 2009, http://online.wsj.com/article/SB123734123180365061.html.
Index
AAA rating
ABCP Money Market Fund Liquidity Facility (AMLF)
Acceleration phase, prototypical bailout
Accounting:
fraud/scandals
rules
Actuarial tables
Adhocracy
Adjustable rate mortgages (ARMs)
After-inflation
Agdern, Bob
Agnew, Spiro
Agricultural Adjustment Act (AAA)
Agricultural industry
Allison, Herbert
Alt-A mortgages
Alternative energy industries
Altucher, James
Ambac
American Home Mortgage
American International Group (AIG):
bailout money to
failure of
Financial Products (FP) division (AIGFP)
incentive programs
rescue of
TARP rescue
Ameriquest
Amtrak
Analysts, functions of
Annual growth rate
Antitrust legislation
AOL
Apologies
Apple
Application fraud
Appraisal(s):
fraud
importance of
Appraisers:
blame/responsibility of
roles of
Arbitrage
Argent
Asian contagion/Asian flu
Asset management companies (AMCs)
Asset management theory
Asset prices:
falling
focus on
protection strategies
Assets, toxic
Atkins, Paul
Auctions
Auto-correction mechanisms
Automobile industry . See also Chrysler Corporation; Ford Motor Company; General Motors
Aviation industry
Baby boom generation
Bailout(s):
costs of
hazards of
historical perspectives
negative impact of
perceptions of
political mechanisms
ten-step pattern of
Bailout Nation:
American Insurance Group (AIG)
Bear Stearns
Citigroup
development of
Federal Reserve and
history of bailouts
Bair, Sheila
Balance sheets
Balloon mortgage
Banco Santander
Banglalore, Asha
Bank failures, historical perspectives . See also specific banks
Bank for International Settlement (BIS)
Bank holding companies
Banking industry:
during Great Depression
historical perspectives
loans to
regulation of
TARP
Banking regulators
Banking sector
Banknotes
Bank of America (BoA):
bailout money to
failure of
Merrill Lynch acquisition
Bank of England
Bank of New York Mellon
Bank runs
Bankruptcy:
economic impact of
largest in U.S. history, see Lehman Brothers
protection strategies
rate of
reorganization
Barclays
Bargain hunters
Bear market
Bear Stearns:
failure of
lessons from
senior management compensation
“Bear Stearns rule,”
Berkshire Hathaway
Bernanke, Ben
Bethlehem Steel
Bildt, Carl
Bipartisanship
Black Monday
Blame for economic conditions:
misplaced
targets for
Blankfein, Lloyd
Blinder, Alan S.
Bloomberg, Michael
Blow-off tops
Blue chips:
corporate bonds
stocks
Boards of directors
Bond fund management
Bondholders
Bond insurance
Bond market
Bond-rating agencies
Bonds, types of
Bond traders
Bonuses, see Incentive programs
with bailout money
stock options
Boockvar, Peter
Boom-and-bust cycles. See also specific industries/sectors
Boom/bust economy
Boom, bust, panic, and renewal cycle
Born, Brooksley
Borrowers, blame/responsibility of
Borrowing to invest
Boskin Commission
Bretton Woods agreement
Brodsky, Paul
Broker-dealer, naked shorts
Brokerage firms
Browning, E. S.
“Bubble vision,”
Buffett, Warren
Bull market
Bundled mortgages
Bush, George Sr.
Bush, George W. . See also Bush Administration
Bush Administration
Business cycles
Business models
“Buy the dip” strategy
Calyon/Credit Agricole
Capacity utilization
Capital, generally:
allocation
cost of
flow
injections
misallocation of
preservation
Capital expenditure (capex) recession
Capital markets
Capital-raising
Capitalism. See also Casino capitalism; Free market system
Carter Administration
Case-Shiller indexes
Casino capitalism
Cayne, Jimmy
CDOn
Center for Responsible Lending
Central bank, see Federal Reserve System
attempted development of
dissolution of
roles of
CEOs/executives:
annual compensation
attitudes of
blame/responsibility of
bonuses after bailout
incentive programs
listing of bonus/incentive packages
overcompensation of
young CEOs
Chaos, influential factors
Chapter 11 bankruptcy
Chapter 11 reorganization
Chapter 7 bankruptcy
Chartered banks, jurisdiction over
Cheap money
China:
as bailout lender
economic growth
U.S. treasuries purchase
China Construction Bank
Chrysler Corporation
Cisco
Citadel Investment Group
Citibank
Citigroup:
bailout money to
collapse of
historical perspectives
merger with Travelers Group
structured investment vehicles (SIVs)
Citigroup Authorization Act
Civilian Conservation Corps (CCC)
Civil Works Administration (CWA)
Clear Channel Communications
Clinton, Bill
CMGI
Coal industry
Cohn, Gary
Collateralized debt obligations (CDOs)
Collateralized loan obligations (CLOs)
Collateralized mortgage obligations (CMOs)
Commercial banking industry
Commercial mortgages
Commercial Paper Funding Facility LLC (CPFF)
Commercial property lending (CMBs)
Commercial real estate loans
Commodities market
Commodity Futures Modernization Act (CFMA)
Commodity Futures Trading Commission (CFTC)
Communications Act of 1934
Community Reinvestment Act (CRA)
Compensation systems
Competition, benefits of
Complexity
Computer industry
Computer software, mortgage application evaluation
Confessional season
Congress:
bipartisanship
blame/responsibility of
Glass-Steagall Act, repeal of
National Monetary Commission
Public-Private Investment Program (PPIP) and
Troubled Assets Relief Program (TARP)
Conservatorships
Construction industry
Consumer habits
Consumer price index (CPI)
Consumer spending
Continental Illinois Bank
Convertible preferred bonds
Corporate governance
Corporate welfare
Correlation vs. causation error
Corrigan, Gerry
Corruption
Cost of living adjustment (COLA)
Counterfeiting
Counterparties
Counterparty risk
Countrywide Financial
Covel, Michael
Cox, Christopher
Creative destruction
Credit crunch
Credit default swaps (CDSs)
Credit lines
Credit market:
attempted rescue in 2007
boom-and-bust cycle
collapse of
creation of (2003-2007)
credit bubble
credit cards
crisis in
frozen
unregulated credit
Creditors, unsecured
Credit rating
Credit rating agencies. See also Rating agencies
Credit Suisse
Creswell, Julie