The current crisis Points covered in this lecture: - Background to the crisis (debt; aftermath of recession in early 2000s). - Banks and mortgages. - Subprime,

Slides:

Advertisements

Similar presentations

Our recession How did we get here ? Part of the problem was your beautiful house.

Advertisements

Financial Crisis of 2008 Econ Worst recession in 80 years How did it happen? How was the situation before the crisis? ‘ Great Moderation’ Stable.

THE CURRENT WORLDWIDE FINANCIAL AND ECONOMIC CRISIS MICHAEL D. INTRILIGATOR PROFESSOR OF ECONOMICS, POLITICAL SCIENCE, AND PUBLIC POLICY, UCLA AND SENIOR.

Analysis and Comparison of the Regulatory Responses to the Great Depression and Financial Crisis of By Devon Beaty.

The Old Days Home buyer Regulated Retail Bank 1 $ Mortgage.

Topic 5. The Crisis of Securitization, plus … 2. Huge World Capital Surplus produced … The Shadow Banking System.

SUBPRIME MORTGAGE LOANS Nwo&feature=related.

The Subprime Mortgage Crisis

The Great Recession Causes & Prospects

Structured Finance and the Global Financial Crisis.

Prepared for Dr. Ramon Castillo Econ 462 CALIFORNIA STATE UNIVERSITY, LOS ANGELES Spring 2011 U.S Financial Crisis Present by Huan.

Financial Crisis and Market Panic Keith Maskus October 27, 2008.

Credit and Liquidity: Cause and Resolution of the 2008 Financial Crisis John Cappellucci, John Piirainen, Rodolfo Rosas Ben Ashton.

October 13, 2008 The Subprime Crisis, Panic and Crash: The Day Trust Died.

Lecture 10 Thursday, October 2 Finance. Some Basic Concepts Money Investment Credit Assets and Capital gains Securities: Stocks, bonds, derivatives, etc.

The Subprime Mortgage Crisis a.k.a. The Great Recession The Greatest Recession Powerpoint Ever!

The Financial Crisis of and the Great Recession A Massive Failure of the Financial and Political Elites in the United States: The Crisis of 2008.

GLOBALIZATION LESSON 3 GLOBAL FINANCIAL CRISIS. OBJECTIVES Review events leading up to financial crisis that struck the US in Explore the reverberations.

Financial Collapse Destruction of Wealth Collapse of Banks Falling Housing Prices Freezing Credit Markets Attributable to Credit Default Swaps?

CREDIT DEFAULT SWAPS An Example. A Pension Fund Investment A Pension Fund has $1 billion to invest An option is to lend the money to a bank, investment.

12: Regulating Capital 1 December 3, An Idea from Last Time A fringe benefit increases surplus if its cost to the employer is less than its benefit.

THE GREAT CONTRACTION : WHO CAUSED IT & HOW DID IT HAPPEN? By : Charlie Haumesser Discussants : Ashley Hucksoll & Mikael Leveille.

Do Now: Brainstorm the functions or uses of money.

The Impact of the Financial Crisis on the Finnish housing market and Households By Elias Oikarinen Financial Crisis, Property Markets & Homeownership,

1 The Housing Bubble Chapter Housing and the bubble The housing bubble is one of the main causes of the current downturn for two reasons: Decrease.

Why the Bailout of AIG Necesary Susan Matthews Mark Contreras Sean Foglia Rick Ramirez.

The subprime crisis and the credit crunch MK, Unit 14.

Financial Crisis Activity * Thanks to Curt Anderson, University of Minnesota, Duluth.

The “Great Recession”: The Government’s Response.

Sub-Prime Crisis Dr. Green. False Prosperity of the Credit Economy Low interest rates – Car loans—no money down or low interest – Credit card loans—0%

Speculative Bubbles Holland

THE BUSINESS CYCLE. Good news or bad news for the GDP? recessionpeakexpansion upturndepressiondownturn contractiontroughdownswing recovery slumpboom.

Causes of the Financial Crisis (PREP: Open NPR clip here and load at beginning of lecture) (PREP: Open NPR clip here and load at beginning of lecture)

1 Section 2B Financial Crisis of Overview Key events of the economic crisis The four causes of the economic crisis 3 lessons we should learn from.

Money, Banking, and Financial Institutions 14 McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

Derivatives. derive (derives, deriving, derived): to obtain sg from sg else derivative: sg derived, dependent upon another thing.

Economic Bubbles How the housing market led to the Great Recession.

POLITICAL ECONOMY OF GLOBAL BANKING CRISES MUSTAFA AKAYDIN HALİL BÜLBÜL.

Overview   How did the financial crisis affect us?   What are some likely hypotheses regarding the causes of the financial collapse?   What do today's.

Macroeconomic Issues The Great Recession: GDP begins to drop Shaded area = recession.

ECON 5570: Money and Banking

An Overview of Recent Financial Problems: Focus on U.S. Credit is necessary for economies to expand: Investors provide it for entrepreneurs Entrepreneurs.

Causes of the Great Depression. Signs of economic trouble Uneven wealth – 1% of population controlled 34% of the wealth. Living on credit – Installment.

CORTLAND FUND SERVICES. VALUATION PROCESSES 2 FAS 157 Asset Levels Level 1 Quoted prices in active markets for identical assets or liabilities Level 2.

The Financial Crisis of 2008 By Franz Soerensen. The Creation of the bubble (1 of 8) Prior to deregulation fewer could get mortgages (Ferguson) Lenders.

 Financial Crises:  Chapter 9  Regulation and Capture  Calomiris and Johnson.

5 October 2015 by Sigrid Brevik Wangsness.  The largest economy in the world with a major impact on the global economy  Until October 2008 an economic.

The Creation of a Housing Bubble. Speculative Bubbles USA Holland Economic Bubbles have existed throughout history!

 Great Recession. History  Great Depression  Further Regulation  No Speculating.

Meltdown Monday Tutor2u Economics 15 th September 2008.

Lecture 16 Subprime Crisis.

Key Terms Financial/Housing Crisis. Debt When you owe more money than you have.

12: Lender of Last Resort 1 December 9, An Idea from Last Time A fringe benefit increases surplus if its cost to the employer is less than its.

2008 Macroeconomic Highlights. Economic Slowdown Begins Q4 of 2007: – Real GDP declines in Q4 of 2007 Shaded area = recession.

Figure 8.3: Subprime Lending Fiasco – U.S. Housing Bubble U.S. Housing Bubble Unsustainably High House Prices Very Low Interest Rates Excessive Foreign.

Global Financial Crisis GLOBALIZATION LESSON 3. Objectives  Review events leading up to financial crisis that struck the US in  Explore the reverberations.

Chapter 14 Financial Crises and the Subprime Meltdown.

Lecture 10 Thursday, February 16 Finance.

The Global Financial Crisis

Yonsei GSIS Bae, Deuk Han

The 2007 Financial Crisis Who is to blame?.

Housing Bubble Review #1: What is a mortgage?

Figure 8.1: Subprime Lending Fiasco – Stages

Speculative Bubbles Holland

What led to the worst financial crisis of our time?

Financial Crises and the Subprime Meltdown

Class 3- The Crash October 16, 2010

بحران مالي جهاني ليلا كاظمي بهار 1389.

The 2008 Financial Crisis.

Securitization and Mortgage Crisis: The Fall of The Greatest

Presentation transcript:

The current crisis Points covered in this lecture: - Background to the crisis (debt; aftermath of recession in early 2000s). - Banks and mortgages. - Subprime, securitization and credit default swaps. - Collapse and bailout. - Globalization of the crisis.

The background Debt: real wage decline and increased indebtedness since 1970s : stock market crash prompting low interest rates. Rising house prices as collateral on loans.

The banking system 1933: Glass-Steagall Act (repealed 1999) “Old-style” banking 1999: Gramm-Leach-Blilely Act “New-style” banking and mortgage products

Subprime and securitization What happens to a mortgage once it has been made? Why do banks lend to high-risk customers? Who buys “toxic” assets and why?

Credit default swaps Insurance Gambling The demise if AIG (2008)

Why did it collapse and what happened in the aftermath? Housing market collapse and foreclosure “Bail-out”: was there an alternative and whom did it help? Were there alternatives?

Globalizing the crisis What does the future hold? The latest news …

Word list kilter (p. 2)unbridled (p. 3) lure (p. 6)parsing (p. 6) tout (p. 7)vilification (p. 10) glibly; pittance (p. 12)