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Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis
- By Mark Zandi
- Published Jul 9, 2008 by FT Press.
- Copyright 2009
- Dimensions: 6 X 9
- Pages: 288
- Edition: 1st
- Book
- ISBN-10: 0-13-714290-0
- ISBN-13: 978-0-13-714290-3
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Product Author Bios
Mark Zandi is Chief Economist and co-founder of Moody’s Economy.com, Inc., where he directs the firm’s research and consulting activities. Moody’s Economy.com is an independent subsidiary of the Moody’s Corporation and provides economic research and consulting services to global businesses, governments and other institutions. His research interests include macroeconomic and financial economics, and his recent areas of research include an assessment of the economic impacts of various tax and government spending policies, the incorporation of economic information into credit risk analysis, and an assessment of the appropriate policy response to real estate and stock market bubbles. He received his PhD from the University of Pennsylvania, where he did his PhD research with Gerard Adams and Nobel Laureate Lawrence Klein, and his BS degree from the Wharton School at the University of Pennsylvania.
“The obvious place to start is the financial crisis and the clearest guide to it that I’ve read is Financial Shock by Mark Zandi. ... it is an impressively lucid guide to the big issues.”
—The New York Times
“In Financial Shock, Mr. Zandi provides a concise and lucid account of the economic, political and regulatory forces behind this binge.”
—The Wall Street Journal
“Aggressive builders, greedy lenders, optimistic home buyers: Zandi succinctly dissects the mortgage mess from start to (one hopes) finish.”
—U.S. News and World Report
“A more detailed look at the crisis comes from economist Mark Zandi, co-founder of Moody's Economy.com. His “Financial Shock” delves deeply into the history of the mortgage market, the bad loans, the globalization of trashy subprime paper and how homebuilders ran amok. Zandi's analysis is eye-opening. ... he paints an impressive, more nuanced picture.”
—Kiplinger's Personal Finance Magazine
“If you wonder how it could be possible for a subprime mortgage loan to bring the global financial system and the U.S. economy to its knees, you should read this book. No one is better qualified to provide this insight and advice than Mark Zandi.”
—Larry Kudlow, Host, CNBC’s Kudlow & Company
“Every once in a while a book comes along that’s so important, it commands recognition. This is one of them. Zandi provides a rilliant blow-by-blow account of how greed, stupidity, and recklessness brought the first major economic crises of the 21st entury and the most serious since the Great Depression.”
—Bernard Baumohl,Managing Director, The Economic Outlook Group and best-selling author, The Secrets of Economic Indicators
“Throughout the financial crisis Mark Zandi has played two important roles. He has insightfully analyzed its causes and thoughtfully recommended steps to alleviate it. This book continues those tasks and adds a third—providing a comprehensive and comprehensible explanation of the issues that is accessible to the general public and extremely useful to those who specialize in the area.”
—Barney Frank, Chairman, House Financial Services Committee
The subprime crisis created a gigantic financial catastrophe. What happened? How did it happen? How can we prevent similar crises from happening again? Mark Zandi answers all these critical questions—systematically, carefully, and in plain English.
Zandi begins with a fast-paced overview and then illuminates the deepest causes, from the psychology of homeownership to Alan Greenspan’s missteps. You’ll see the home “flippers” at work and the real estate agents who cheered them on. You’ll learn how Internet technology and access to global capital transformed the mortgage industry, helping irresponsible lenders drive out good ones.
Zandi demystifies the complex financial engineering that enabled lenders to hide deepening risks, shows how global investors eagerly bought in, and explains how flummoxed regulators failed to prevent disaster, despite crucial warning signs.
Most important, Zandi offers indispensable advice for investors who must recognize emerging bubbles, policymakers who must improve oversight, and citizens who must survive whatever comes next.
- Liar’s loans, flippers, predatory lenders, delusional homebuilders
How the housing market came unhinged, and the whirlwind came together - Alan Greenspan’s trillion-dollar bet
Betting on the boom, ignoring the bubble - The subprime market goes global
Worldwide investors get a piece of the action—and reap the results - Wall Street’s alchemists: conjuring up Frankenstein
New financial instruments and their hidden contents - Back to the future: risk management for the 21st century
Respecting the “animal spirits” that drive even the most sophisticated markets
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51 of 53 people found the following review helpful
Easy to read expose of the Sub-Prime guilty parties, By
This review is from: Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
In this age of full disclosure, I received this book free from the Amazon Vine program....with the condition that I publish a book review.I may have purchased this book anyway. Back in the middle of 2007 when the sub-prime problem first surfaced......I remember a talking head on TV saying the sub-prime issue would not become a problem. His rationale was that sub-prime only represented a single digit percentage of the total mortgage market......and therefore it would have no major impact on financial markets......even if all sub-prime debt went bad. Boy was he wrong!! I have been curious how the sub-prime fiasco almost brought down the entire world financial markets. Another disclaimer is that I have not personally been involved much with mortgage loans. My first mortgage was back in 1978. It was a 30 year fixed mortgage, and since I only put 10% down, it was mandatory to have mortgage insurance......until my equity reached 20%. I got additional 30 year... Read more
15 of 16 people found the following review helpful
Phenomenally Educational for Even the Most Financially Illerate, By
This review is from: Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
I've learned how securitization, unsavory lending, lies by borrowers and lenders, the effect home flippers had on the market, the accounting standard of "mark to market," and other various lending practices and financial instruments have caused the economic havoc we are now experiencing. Lenders are currently leary of lending money to financially sound borrowers due to fears of further financial crises. There are also more rigid lending criteria which further compounds the problem.The author does a fantastic job of explaining the complexity that evolved in the mortgage market over the last 10+ years. As a result, this book is a plethora of information on how the housing crisis has snowballed into what we are experiencing now. The author explains everything in detail in an engaging and easy-to-understand narrative that even the most financially illerate person can understand. I would have rated this book TEN STARS if that option were available. "Financial... Read more
6 of 6 people found the following review helpful
Very interesting,
This review is from: Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)
The present financial crisis seems to never stop echoing and reechoing through the American, and indeed world, economy. But, what really happened? In this book, author and economist Mark Zandi, takes an in-depth look at what happened, how and why.Now, I did find this to be a very interesting book, one that really opened my eyes on what has been going on, and what is still going on. Admittedly, towards the middle, the book got a little too technical for me, but one cannot look at a problem as broad and deep as this without getting technical somewhere along the line. If you want to understand how we got to where we are, and what steps we need to take, then you really must read this book. I do recommend it to everyone. (Review of Financial Shock: A 360º Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis) |
Online Sample Chapter
A 360º Look at the Subprime Mortgage Implosion
Sample Pages
Table of Contents
Introduction 1
Chapter 1: Subprime Précis 9
Chapter 2: Sizing Up Subprime 29
Chapter 3: Everyone Should Own a Home 45
Chapter 4: Chairman Greenspan Counts on Housing 63
Chapter 5: Global Money Men Want a Piece 79
Chapter 6: Bad Lenders Drive Out the Good 95
Chapter 7: Financial Engineers and Their Creations 111
Chapter 8: Home Builders Run Aground 129
Chapter 9: As the Regulatory Cycle Turns 143
Chapter 10: Boom, Bubble, Bust, and Crash 159
Chapter 11: Credit Crunch 173
Chapter 12: Timid Policymakers Turn Bold 191
Chapter 13: Economic Fallout 213
Chapter 14: Back to the Future 229
Endnotes 245
Index 259
Errata
Book
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