5. The Bubble Bursts

Chapters in this book

1. Frontmatter i
2. Contents v
3. Preface vii
4. Introduction: In Praise of Homeownership 1
5. 1. Housing Finance before the New Deal 2 The New Deal Mortgage 16
6. 2. The New Deal Mortgage 38
7. 3. The Rise of Securitization 65
8. 4. The Boom and the Bubble 81
9. 5. The Bubble Bursts 110
10. 6. Timing the Bubble 131
11. 7. Demand or Supply? 135
12. 8. Theories of the Bubble 148
13. 9. The Wall Street Securitization Bubble 163
14. 10. The Key Market Failure 181
15. 11. Postcrisis Reforms and Developments 204
16. 12. Principles for Reform 232
17. 13. Meet Franny Meg 255
18. Conclusion 262
19. Appendix A: The Pre–New Deal Farm Finance System 265
20. Appendix B: The Levitin-Wachter Subprime PLS Dataset 271
21. Appendix C: CDO Manager Compensation 273
22. Glossary 279
23. Notes 283
24. Acknowledgments 361
25. Index 363