Review for Exam 2
October 10, 2017
Exam 2 on Thu, Oct 12
- Open notes
- No phones, laptops, watches
- No talking or collaborating with neighbors
- No leaving classroom
- Term Papers Due Nov 2
- Scheduling Presentations for Nov 7, 9, 14, 16
- Days/time slots are first come, first serve
- Jeremy Grantham with Charlie Rose
Topics:
- 2008 Housing/Mortgage/Financial Crisis
- Monetary Policy
- Federal Reserve
- Alan Greenspan
- Ben Bernanke
- Tim Geitner
- Securitization and Derivatives
- Mortgage backed securities (MBS)
- Collateralized Debt Obligations (CDOs)
- Credit Default Swaps
- Subprime Lending
- Low-income borrowers
- Predatory lending
- Loan origination fees/bonuses
- Deregulation
- Laissez-faire capitalism, Reaganomics
- 1999 Gramm-Leach-Bliley Act – repeals 1933 Glass-Steagall Act
- 2000 Commodity Futures Modernization Act – prevents regulation of most derivatives
- 2004 SEC proposes “voluntary regulation” and lower capital requirements
- Mortgage Meltdown
- Skyrocketing default rates
- Dropping property values
- Strategic default
- Neighborhood deterioration
- Crisis Culprits
- Banks’ Excessive Leverage
- Subprime Lenders
- Federal Reserve Low Interest Rates
- Rating Agencies
- Secondary Mortgage Market
- Fannie Mae
- Freddie Mac
- Greedy Borrowers (the only group punished)
