A trenchant analysis of the berserk market dynamics that laid low the American economy.
Rickety Wall Street innovations and systemic market failure caused the rise in housing prices and mortgage debt that precipitated the Great Recession of 2008, according to this study.
Georgetown law professor Levitin and Wharton economist Wachter reject prominent explanations of the housing bubble of the 2000s. It was not, they contend, primarily caused by the Community Reinvestment Act’s requirement that lenders make loans to poor borrowers or by loose monetary policy or by a global savings glut. The authors advance their own complex, systematic theory of financial markets gone awry. The problem started, they argue, when the traditional 30-year fixed-rate mortgage—“the hero of our story”—was supplanted with exotic, adjustable-rate mortgages or no-amortization loans that lured borrowers with low initial payments. These mortgages were pooled and sold to investors as “private-label securities” by unregulated lenders who grabbed a market share from the staid, federally regulated corporations Fannie Mae and Freddie Mac. Demand for more mortgages to sell to investors drove lenders to make loans to bad credit risks. These iffy mortgages were packaged in complicated, opaque collateralized debt obligations and sold to still more investors with no serious accounting of their risks. That expansion of cheap credit caused borrowers to bid up housing prices to unsustainable levels on mortgage-backed securities whose risks were not reflected in their prices—with no short-selling mechanism to let the market correct itself. Dysfunctions like these are intrinsic to housing markets, the authors contend, and can only be solved by a sweeping reregulation of housing finance that would entrench traditional fixed-rate mortgages under a more powerful, federally chartered corporation that they dub “Franny Meg.” Levitin and Wachter base their intricate, incisive argument on a close reading of the scholarly literature backed up by careful attention to economic evidence and price data, which they present in illuminating charts. The book is aimed at academics and policymakers, but interested lay readers can also tackle it thanks to the authors’ thorough explanations and prose that’s always lucid and even stylish. (“It took only a very small amount of dumb or conflicted money in CDOs to build an enormous pyramid of leverage in the housing market.”) The result is an indispensable analysis of the crisis and the far-reaching measures needed to prevent a recurrence.
A trenchant analysis of the berserk market dynamics that laid low the American economy.Pub Date: June 9, 2020
ISBN: 978-0-674-97965-9
Page Count: 400
Publisher: Harvard Univ.
Review Posted Online: Jan. 20, 2021
Kirkus Reviews Issue: March 15, 2021
Review Program: Kirkus Indie
Smart, engaging sportswriting—good reading for organization builders as well as Pats fans.
Prolific writer Benedict has long blended two interests—sports and business—and the Patriots are emblematic of both. Founded in 1959 as the Boston Patriots, the team built a strategic home field between that city and Providence. When original owner Billy Sullivan sold the flailing team in 1988, it was $126 million in the hole, a condition so dire that “Sullivan had to beg the NFL to release emergency funds so he could pay his players.” Victor Kiam, the razor magnate, bought the long since renamed New England Patriots, but rival Robert Kraft bought first the parking lots and then the stadium—and “it rankled Kiam that he bore all the risk as the owner of the team but virtually all of the revenue that the team generated went to Kraft.” Check and mate. Kraft finally took over the team in 1994. Kraft inherited coach Bill Parcells, who in turn brought in star quarterback Drew Bledsoe, “the Patriots’ most prized player.” However, as the book’s nimbly constructed opening recounts, in 2001, Bledsoe got smeared in a hit “so violent that players along the Patriots sideline compared the sound of the collision to a car crash.” After that, it was backup Tom Brady’s team. Gridiron nerds will debate whether Brady is the greatest QB and Bill Belichick the greatest coach the game has ever known, but certainly they’ve had their share of controversy. The infamous “Deflategate” incident of 2015 takes up plenty of space in the late pages of the narrative, and depending on how you read between the lines, Brady was either an accomplice or an unwitting beneficiary. Still, as the author writes, by that point Brady “had started in 223 straight regular-season games,” an enviable record on a team that itself has racked up impressive stats.
Smart, engaging sportswriting—good reading for organization builders as well as Pats fans.Pub Date: Sept. 1, 2020
ISBN: 978-1-982134-10-5
Page Count: 592
Publisher: Avid Reader Press
Review Posted Online: Aug. 25, 2020
Kirkus Reviews Issue: Sept. 15, 2020
Perhaps not magic but appealing nonetheless.
Want to get ahead in business? Consult a dictionary.
By Wharton School professor Berger’s account, much of the art of persuasion lies in the art of choosing the right word. Want to jump ahead of others waiting in line to use a photocopy machine, even if they’re grizzled New Yorkers? Throw a because into the equation (“Excuse me, I have five pages. May I use the Xerox machine, because I’m in a rush?”), and you’re likely to get your way. Want someone to do your copying for you? Then change your verbs to nouns: not “Can you help me?” but “Can you be a helper?” As Berger notes, there’s a subtle psychological shift at play when a person becomes not a mere instrument in helping but instead acquires an identity as a helper. It’s the little things, one supposes, and the author offers some interesting strategies that eager readers will want to try out. Instead of alienating a listener with the omniscient should, as in “You should do this,” try could instead: “Well, you could…” induces all concerned “to recognize that there might be other possibilities.” Berger’s counsel that one should use abstractions contradicts his admonition to use concrete language, and it doesn’t help matters to say that each is appropriate to a particular situation, while grammarians will wince at his suggestion that a nerve-calming exercise to “try talking to yourself in the third person (‘You can do it!’)” in fact invokes the second person. Still, there are plenty of useful insights, particularly for students of advertising and public speaking. It’s intriguing to note that appeals to God are less effective in securing a loan than a simple affirmative such as “I pay all bills…on time”), and it’s helpful to keep in mind that “the right words used at the right time can have immense power.”
Perhaps not magic but appealing nonetheless.Pub Date: March 7, 2023
ISBN: 9780063204935
Page Count: 256
Publisher: Harper Business
Review Posted Online: March 23, 2023
Kirkus Reviews Issue: April 15, 2023
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