Lesson 6: Monetary Policy and the 2008 Housing Crisis

September 19, 2017

Review:

Presentation:

  • Monetary Policy and the Housing Crisis of 2008
    • Historical context
      • Bush II elected and takes office in Jan 2001
      • Tech Stocks (NASDAQ) and tech jobs decline weakening the economy
      • 9/11 and continued economic weakness
      • War in Afghanistan and Iraq
      • 2004 Election
      • Political pressure to stimulate economy
    • Federal Reserve
      • Central Bank for the US and, in some ways, the World
      • Alan Greenspan
        • Federal Reserve Chairman (1987-2006)
        • Free market champion appointed by President Reagan
      • Ben Bernanke
        • Federal Reserve Chairman (2006-2014)
        • Promised to continue Greenspan policies
        • At the eye of the storm in 2008
      • Kept interest rates too low for too long (2001-2004)
    • Housing Bubble
      • Began inflating in 2001
      • Low interest rate environment
      • Financial engineering of mortgage debt
        • Mortgage backed securities
        • Derivatives (aka “financial weapons of mass destruction” – Warren Buffet)
        • Subprime, Alt-A, NINJA
    • Money for Nothing: Inside the Federal Reserve

Assignment:

  • Select another investment property to analyze (2 total)

Justin

Justin Holman is CEO of Aftermarket Analytics, where he leads efforts to develop cutting edge sales forecasting and inventory optimization technology for the Automotive Aftermarket. Prior to joining Aftermarket Analytics, Justin managed corporate consulting for the Strategy & Analytics division at MapInfo Corporation, leading major projects for retail clients including The Home Depot, Darden Restaurants, Bridgestone-Firestone, Sainsbury’s and New York & Company. Before that, Justin served as Vice President of Software Development at LogicTools, now part of IBM's supply chain application software group. Justin holds a B.A. from Claremont McKenna College, a Ph.D. from the University of Oregon and an Executive Management certificate from Northwestern University's Kellogg School of Management.

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