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  • The Global Financial Crisis, Part 1: The Housing Bubble

    The Global Financial Crisis, Part 1: The Housing Bubble
    2025/05/19
    In this episode, we tell the story of the modern mortgage market, how Wall Street financialized it, and how easy credit inflated one of the biggest bubbles in American history. A bubble that, when it finally popped, nearly brought down the entire global financial system.The housing bubble left scars, changed institutions, and shaped the economy we live in today. It’s impossible to understand the social and economic forces in the 2010s and 2020s without first studying the Global Financial Crisis. At the root of the crisis was a nation-wide housing bubble.In Part 1 of this two-part series, we cover how The New Deal completely restructured the US mortgage industry. We discuss how homeownership became a critical part of the American dream fueled by an abundance of credit and bipartisan support for homeownership—especially after World War II.We touch on the evolution of mortgages—from local banks that relied on personal relationships to global giants driven by the forces of globalization and financial deregulation in the 1980s and 1990s.By the early 2000s, homeownership was at record highs. Credit was cheap. Profits at mortgage originators and banks were at record levels. At the center of the boom was the mortgage market and the flawed assumption that housing prices never go down.Chapters:(01:28) Setting the Scene(03:17) Market Backdrop(10:39) History of Mortgages, Fannie, and Freddie(24:11) Mortgage-Backed Securities (MBS)(30:40) MBS and Rating Agencies(43:31) Collateralized Mortgage Obligations and Flaws in the Mortgage Market(51:24) Mortgage Originators and Subprime(56:08) The Global Savings Glut, Interest Rates, and Commodity Supercycle(01:06:56) Mortgage Originators Get Big(01:14:41) Fed Policy and Interest Rates(01:19:00) Explosive Growth in Subprime(01:26:20) The Housing Bubble Inflates(01:33:53) State of the Market at the End of 2006References:The Great American Housing Bubble: What Went Wrong and How We Can Protect Ourselves in the Future by Adam J. Levitin, Susan M. WachterAll the Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe NoceraPanic: The Betrayal of Capitalism by Wall Street and Washington by Andrew Redleaf and Richard VigilanteThe Big Short: Inside the Doomsday Machine by Michael Lewis (and the movie)On the Brink: Inside the Race to Stop the Collapse of the Global Financial System by Henry PaulsonToo Big to Fail by Andrew Ross Sorkin (and the movie)Crashed: How a Decade of Financial Crises Changed the World by Adam ToozeFool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe by Gillian TettThe Courage to Act: A Memoir of a Crisis and Its Aftermath by Ben BernankeFirefighting: The Financial Crisis and Its Lessons by Ben Bernanke, Hank Paulson, and Timothy GeithnerThe Rise and Fall of Bear Stearns by Alan Greenberg and Mark SingerPBS Frontline Documentary: The WarningPBS Frontline Documentary: Money, Power and Wall StreetLectures by Ben Bernanke at Georgetown (link)Warren Buffett on Derivatives (2002 Shareholder Letter)Warren Buffett Interview with Andrew Ross Sorkin (Ten Year Anniversary Special from CNBC)Reports by the Financial Crisis Inquiry Commission (main report, HHT dissent, Wallison dissent) This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.crashesfm.com
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    1 時間 41 分
  • The Dot-Com Bubble

    The Dot-Com Bubble
    2025/03/27
    In the 1990s, the personal computer and the internet combined to transform the global economy. The dot-com boom built on the promise of the World Wide Web led to one of the longest economic expansions on record. From the Netscape IPO in 1995 to its peak in early 2000, the Nasdaq skyrocketed over 800%. By 2002, it came tumbling down erasing nearly $5 trillion in market value.The boom turned into a crash that permanently changed how Wall Street operates, wiped out scores old and new companies, restructured the power structures of Silicon Valley, and revolutionized the global economy. Most importantly, there are elements of the dot-com story that rhyme with today's AI boom.Chapters:(01:09) Market Backdrop(12:51) Technology Backdrop(21:31) Birth of Dot Com(43:45) Setting the Stage on Wall Street(01:01:13) The Crash before the Crash(01:10:59) Euphoric Markets(01:23:51) The Bubble Pops(01:45:30) The AftermathReferences:Origins of the CrashDot.conThe New New ThingTechnological Revolutions and Financial CapitalStocks for the Long RunThe Rise and Fall of American GrowthThe Fabulous DecadeCapital AccountMr. Buffett on the Stock Market This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.crashesfm.com
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    2 時間 4 分