PPT-Securitization and the Credit Crisis of 2007

Chapter 8 1 Fundamentals of Futures and Options Markets 9th Ed Ch 8 Copyright John C Hull 2016 Securitization Traditionally banks have funded loans with deposits Securitization is a way that loans can increase much faster than deposits. The Financial Crisis 2007-2008 and the Great Recession. 1. . Securitization. , plus …. 2. . Huge World Capital Surplus . produced …. The Shadow Banking System . When the . Housing Bubble . Popped it triggered a classic . Steve Keen. Kingston University London. Asymmetric Return Capital. IDEAeconomics. Minsky Open Source System Dynamics. www.debtdeflation.com/blogs. “Nobody could have seen it coming…”. “. The Queen asked me. Options, Futures, and Other Derivatives 8th Edition, Copyright © John C. Hull 2012. 1. Securitization. Traditionally banks have funded loans with deposits. Securitization is a way that loans can increase much faster than deposits. Jenna L. Currie-Mueller. Background. Organization is privileged. Expanding field and contexts. Need inclusivity. A new form of crisis. Tight-coupling . Increased entropy of society. New events that defy current understanding. October 16, 2010. House prices rose rapidly from 2000 to 2006. Subprime mortgages expanded rapidly as well. Increase in house prices slowed down in 2007. Households with excessive debt began to face problems. Up until that time, AAA rated commercial paper had . NEVER. failed.. As a result of AAA rated paper “failing” – by Aug. 2007 credit markets seized up because banks refused to extend credit – even to one another.. Journal of Economic Perspectives Vol. 23, Number 1-Winter 2009 pp., 77-100. Markus L. . Brunnermeier. Princeton University. Bursting of housing bubble forced banks to write down several hundred billion dollars in bad loans caused by mortgage delinquencies. October 16, 2010. House prices rose rapidly from 2000 to 2006. Subprime mortgages expanded rapidly as well. Increase in house prices slowed down in 2007. Households with excessive debt began to face problems. 2. Question to Consider. What are the key challenges police officers face when dealing with persons in behavioral crisis?. 3. Recognizing a. Person in Crisis. Crisis Recognition. 4. Behavioral Crisis: A Definition. Dean Baker, Co-Director. Center for Economic and Policy Research. April 13. , 2012. Key Points on the Economic Crisis . The main cause was the collapse of the $8 trillion housing bubble. The financial crisis was secondary. Jenna L. Currie-Mueller. Background. Organization is privileged. Expanding field and contexts. Need inclusivity. A new form of crisis. Tight-coupling . Increased entropy of society. New events that defy current understanding. Local Crisis bed utilization is low there are only 30 – 40 detentions per year but over half are sent home prior to probable cause hearing. . Need to discuss and identify what barriers to utilizing the crisis bed( location; intoxicated clients; staffing; comfort of staff). . on. . the. . Financial. . Crisis. . :. A. . one. -. Weekend. -. Reader’s. . Guide. -. --------. Gary. . Gorton. . and. . Andrew. . Metrick. Jingyu. . Wang. Sep. The Shadow Banking System . (The Road to Hell is Paved With Good Intentions). Types of Securitization. C. ollateralized . D. ebt . O. bligations (CDO). Asset Back Securities (ABS). Commercial Mortgage Backed Securities (CMBS).