Jackson Library

Lifelong Learning Faculty Seminars: Additional Reading

 

The recent financial meltdown in the US commonly referred to as the "Sub-Prime Mortgage Crisis" has been analyzed extensively and both media and regulators have focused on unscrupulous lending practices as the main source of the problem. This alone does not seem to explain the extent of the write-downs we have seen in the past year, or the banks' initial inability to evaluate the actual extent of their losses, or risk exposure.

In this web seminar we take an alternative approach. Beginning with the products themselves we look for the market failure due to repackaging of collateralized obligations and what enabled the failure to grow unnoticeably to monstrous proportions. The answers to these questions point us towards senior management failure to organize appropriately for investment in instruments which have increased in complexity. Finally, we will draw general lessons for management in a changing environment where information, decision power and the long-term outcomes are separated by an increasing number of layers.

Selected Articles

Additional reading material has been selected by Jackson Library Staff. Due to contractual arrangements, remote access is only available to the current Stanford community and the subscribers of the "Library Databases" offered through the GSB Alumni's Lifelong Learning Program. Other access is limited to onsite at Jackson Library. Inclusion below does not imply University endorsement of ideas expressed.

 

Investors Press Lenders on Bad Loans. Wall Street Journal, 5/28/08
Unhappy buyers of subprime mortgages, home-equity loans and other real-estate loans are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans.
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“Quants gone wild” - The Subprime crisis. Commentary by A.W. Bodine and C.J. Nagel, faculty at Concordia College–New York
3/26/08
With world markets off 20%, Bear Stearns imploding and public companies having lost US$5 trillion in value, politicians and regulators all now seem focused on avoiding a global financial system meltdown.
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Mortgage Crisis Spreads Past Subprime Loans. New York Times, 2/12/08
As home prices fall and banks tighten lending standards, people with good, or prime, credit histories are falling behind on their payments for home loans, auto loans and credit cards at a quickening pace, according to industry data and economists.
View article

Subprime: Tentacles of a Crisis. Finance & Development, Dec2007
The mortgage market turbulence is as much about the breakdown of the structure of U.S. financial markets as it is about bad debt.
View article

Selected Books

	Subprime mortgages : America’s latest boom and bust by Edward M. Gramlich. Urban Institute Press, c2007 HG2040.5.U6 G73 2007
	American nightmare : predatory lending and the foreclosure of the American dream by Richard Lord. Common Courage Press, c2005 HG2040.5.U5 L67 2005

 

Selected Websites

Personal Homepage

Lenders, Borrowers Discuss Bad Loans

Timeline: Sub-prime losses-BBC News

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