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Gretchen Morgenson and Joshua Rosner


Subtitle: How Outsized Ambition, Greed, and Corruption Led to EconomicArmageddon, Henry Holt &Co., NY., 2011, 31 pgs., index, notes, cast of characters


Reviewer comment The authors focus on the political demands that banks and mortgage writers increase the amount of private home ownership. This resulted in a massive increase in creation of mortgages and as the pool for buyers with previously strong financial qualifications was depleated they turned to finding potential buyers with less and less financial qualifications. The mortgages were then assembled into financial securities that were sold to investors. Meanwhile the politicians put pressure on the two government (private) institutions, Fanny Mae and Fredie Mac, to guarantee these mortgagtes. The CEO's of these quasi-government financial institutions, James Johnson, Franklin Raines and David Maxwell, were eager to take advantage of the opportunity to enrich themselves while expanding the power of their corporations. The owners of private mortgage lenders such as Angelo Mozilo, Walter Falk, David Silipigno ans Scott Hartman quickly jumped into action to supply the subprime mortgages that the investment community demanded.
However, Jeffrey Friedman and Wladimir Kraus (Engineering) dispute this as the main cause of the ultimate financial crisis, while agreeing that it did help generate the 'bubble' in housing prices and did create the dangerously unstable financial situation. And Douglas Hubbard focuses on a more general and widespread cause in a general failure of risk management.


Chapter 1


Chapter 2 -


Chapter 3 -


Chapter 4 -


Chapter 5 -


Chapter 6 -


Chapter 7 -


Chapter 8 -


Chapter 9 -


Chapter 10


Chapter 11


Chapter 12


Chapter 13


Chapter 14


Chapter 15




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