Financial Shock (Updated Edition), (Paperback)

Dr. Mark Zandi is chief economist and cofounder of Moody’s Economy.com, an independent subsidiary of Moody’s that provides economic research and consulting services to businesses, governments, and other institutions. His recent research has included studying determinants of mortgage foreclosure and personal bankruptcy; analyzing economic impacts of tax and government spending policies; and assessing policy responses to bubbles in asset markets. He has appeared on NBC’s Meet the Press, NBC News, CBS News, CNN, CNBC, and has served as an economic advisor to John McCain’s presidential campaign and the Obama administration. Zandi holds a Ph.D. from the University of Pennsylvania where he did research with Gerard Adams and Nobel Laureate Lawrence Klein.

Acknowledgments . . . viii

About the Author . . . ix

Introduction . . . 1

Chapter 1: Subprime Précis . . . 9

Chapter 2: Sizing Up Subprime . . . 33

Chapter 3: Everyone Should Own a Home . . . 49

Chapter 4: Chairman Greenspan Counts on Housing . . . 67

Chapter 5: Global Money Men Want a Piece . . . 81

Chapter 6: Bad Lenders Drive Out the Good . . . 97

Chapter 7: Financial Engineers and Their Creations . . . 113

Chapter 8: Home Builders Run Aground . . . 131

Chapter 9: As the Regulatory Cycle Turns . . . 145

Chapter 10: Boom, Bubble, Bust, and Crash . . . 161

Chapter 11: Credit Crunch . . . 175

Chapter 12: Timid Policymakers Turn Bold . . . 193

Chapter 13: Economic Fallout . . . 233

Chapter 14: Back to the Future . . . 251

Endnotes . . . 273

Index . . . 285