Kendra_Smith_Laughs’s Reviews > Crashed: How a Decade of Financial Crises Changed the World > Status Update

"At each step of the way the main concerns were volume and fees. Who had an interest n maintaining quality? Perhaps it was not the government subsidy but these perverse incentives that led to the huge boom in bad lending and the crisis of 2007-2008."

"The idea, in the wake of the savings-and-loans disaster, was to spread risk outward from those immediately involved in lending to mortgage borrowers and to attract investors by turning mortgages into securities that offered a wide range of yield-risk profiles. And it worked. In 1980, 67 percent of American mortgages had been held directly on the balance sheets of depository banks."

"How could this domestic drama shake the world's financial system and precipitate a global crisis? The simple answer is that real estate may be mundane, and McMansions may be nondescript, but they account for a huge share of total marketable wealth worldwide."

"In the fall of 2007, even as quite a different crisis loomed on the horizon, it was the dollar that was still at the center of attention. The Economist warned of a "Dollar panic". Germany's Spiegel magazine announced a "Pearl Harbor without a war." Bill Gross, the kingpin at bond trading giant PIMCO, was reported to be selling dollar assets, as was billionaire investor Warren Buffet."

"The scale of America's deficits made it vulnerable to bond market pressure. The fact that foreign investors might suddenly turn away from Treasurys evoked the nightmare of a sudden stop to external financing of America's imbalances."

"Though it is hardly a secret that we inhabit a world dominated by business oligopolies, during the crisis and its aftermath this reality and its implications for the priorities of government stood nakedly exposed. It is an unpalatable and explosive truth that democratic politics on both sides of the Atlantic has choked on."