Levitin, Adam and Wachter, Susan (2012): Explaining the Housing Bubble. Published in:
Download (1MB) | Preview
There is little consensus as to the cause of the housing bubble that precipitated the financial crisis of 2008. Numerous explanations exist: misguided monetary policy; a global savings surplus; government policies encouraging affordable homeownership; irrational consumer expectations of rising housing prices; inelastic housing supply. None of these explanations, however, is capable of fully explaining the housing bubble.
This Article posits a new explanation for the housing bubble. First, it demonstrates that the bubble was a supply-side phenomenon attributable to an excess of mispriced mortgage finance: mortgage-finance spreads declined and volume increased, even as risk increased—a confluence attributable only to an oversupply of mortgage finance. Second, it explains the mortgage-finance supply glut as resulting from the failure of markets to price risk correctly due to the complexity, opacity, and heterogeneity of the unregulated private-label mortgage-backed securities (PLS) that began to dominate the market in 2004. The rise of PLS exacerbated informational asymmetries between the financial institutions that intermediate mortgage finance and PLS investors. These intermediation agents exploited informational asymmetries to encourage overinvestment in PLS that boosted the financial intermediaries’ volume-based profits and enabled borrowers to bid up housing prices.
This Article proposes the standardization of PLS as an information-forcing device. Reducing the complexity and heterogeneity of PLS would facilitate accurate risk pricing, which is necessary to rebuild a sustainable, stable housing-finance market.
|Item Type:||MPRA Paper|
|Original Title:||Explaining the Housing Bubble|
|Keywords:||housing bubble, securitization, mortgage, MBS, RMBS, CMBS, PLS, Fannie Mae, Freddie Mac, GSE, informational asymmetries, community reinvestment act, affordable housing goals, irrational exuberance, standardization, housing finance, real estate|
|Subjects:||L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L32 - Public Enterprises; Public-Private Enterprises
K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law
L - Industrial Organization > L5 - Regulation and Industrial Policy > L50 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality; Standardization and Compatibility
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Production Analysis, and Firm Location > R31 - Housing Supply and Markets
|Depositing User:||Susan Wachter|
|Date Deposited:||05. Nov 2012 14:29|
|Last Modified:||11. Feb 2013 18:12|
S&P/Case–Schiller Housing Price Indices, STANDARD & POORS, http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff--p-us---- (download file in the “Home Price Index Levels” row, “Seasonally Adjusted” column; view the “Composite-10 CSXR-SA” column in the spreadsheet)
See Edward L. Glaeser, Joshua D. Gottlieb & Joseph Gyourko, Can Cheap Credit Explain the Housing Boom? 1 (Nat’l Bureau of Econ. Research, Working Paper No. 16230, 2010).
infra section II.B; cf. FIN. CRISIS INQUIRY COMM’N, THE FINANCIAL CRISIS INQUIRY REPORT: FINAL REPORT OF THE NATIONAL COMMISSION ON THE CAUSES OF THE FINANCIAL AND ECONOMIC CRISIS IN THE UNITED STATES 124–25 (2011), available at http://www.gpo.gov/fdsys/pkg/GPO-FCIC/content-detail.html
JOHN B. TAYLOR, GETTING OFF TRACK: HOW GOVERNMENT ACTIONS AND INTERVENTIONS CAUSED, PROLONGED, AND WORSENED THE FINANCIAL CRISIS 1–6 (2009).
Ricardo J. Caballero & Arvind Krishnamurthy, Global Imbalances and Financial Fragility, 99 AM. ECON. REV. 584, 584 (2009)
Ben S. Bernanke et al., International Capital Flows and the Returns to Safe Assets in the United States, 2003–2007, at 1¬–3 (Bd. of Governors of the Fed. Reserve Sys., Int’l Fin. Discussion Papers No. 1014, 2011), available at http://www.federalreserve.gov/pubs/ifdp/2011/1014/ifdp1014.htm
Steven Dunaway, Global Imbalances and the Financial Crisis, Council on Foreign Relations, Council Special Report No. 44 (2009)
Ben S. Bernanke, Chairman, Fed. Reserve Sys., Bundesbank Lecture: Global Imbalances: Recent Developments and Prospects (Sept. 11, 2007), available at http://www.federalreserve.gov/newsevents/speech/bernanke20070911a.htm;
Ben S. Bernanke, Chairman, Fed. Reserve Sys., Sandridge Lecture at the Virginia Association of Economists: The Global Saving Glut and the U.S. Current Account Deficit (Mar. 10, 2005) available at http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/
THOMAS SOWELL, THE HOUSING BOOM AND BUST 30–56 (2009); FIN. CRISIS INQUIRY COMM’N FINAL REPORT, supra note 4, at 444
PETER J. WALLISON, AM. ENTER. INST., CAUSE AND EFFECT: GOVERNMENT POLICIES AND THE FINANCIAL CRISIS 2 (2008), http://www.aei.org/files/2008/11/25/20081203_1123724NovFSOg.pdf
Edward Pinto, Op-Ed., Acorn and the Housing Bubble, WALL ST. J. (Nov. 12, 2009, 7:10 PM), http://online.wsj.com/article/SB10001424052748703298004574459763052141456.html
Peter J. Wallison, The True Origins of This Financial Crisis, AM. SPECTATOR, Feb. 2009, available at http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan/print.
Yuliya Demyanyk & Otto Van Hemert, Understanding the Subprime Mortgage Crisis, 24 REV. FIN. STUDIES 1848, 1852 (2011)
Kurt Eggert, The Great Collapse: How Securitization Caused the Subprime Meltdown, 41 CONN. L. REV. 1257, 1257 (2009)
Patricia A. McCoy, Andrey D. Pavlov & Susan M. Wachter, Systemic Risk Through Securitization: The Result of Deregulation and Regulatory Failure, 41 CONN. L. REV. 1327, 1366–67 (2009)
Giovanni Dell’Ariccia, Deniz Igan & Luc Laeven, Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market 1 (Int’l Monetary Fund, Working Paper No. WP/08/106, 2008), available at www.imf.org/external/pubs/ft/wp/2008/wp08106.pdf
Christopher L. Peterson, Predatory Structured Finance, 28 CARDOZO L. REV. 2185, 2188–90 (2007)
Benjamin J. Keys et al., Did Securitization Lead to Lax Screening? Evidence from Subprime Loans, 125 Q.J. ECON. 307, 307–310 (2010)
Benjamin J. Keys et al., Financial Regulation and Securitization: Evidence from Subprime Loans, 56 J. MONETARY ECON. 700, 702 (2009)
Atif Mian & Amir Sufi, The Consequences of Mortgage Credit Expansion: Evidence from the U.S. Mortgage Default Crisis, 124 Q.J. ECON. 1449, 1449–50 (2009)
Atif R. Mian & Amir Sufi, Household Leverage and the Recession of 2007 to 2009, at 6–7 (Nat’l Bureau of Econ. Research, Working Paper No. 15896, 2010)
ROBERT J. SHILLER, IRRATIONAL EXUBERANCE (2d ed. 2005)
Markus K. Brunnermeier & Christian Julliard, Money Illusion and Housing Frenzies, 21 REV. FIN. STUD. 135, 135–36 (2008)
Edward L. Glaeser, Joseph Gyourko & Albert Saiz, Housing Supply and Housing Bubbles, 64 J. URB. ECON. 198, 198–99 (2008); Thomas Davidoff, Supply Elasticity and the Housing Cycle of the 2000s, at 1–4 (Soc. Sci. Research Network, Working Paper No. 1562741, 2010), http://ssrn.com/abstract=1562741.
FIN. CRISIS INQUIRY COMM’N FINAL REPORT, supra note 4, at 74–80. Deregulatory legislation, such as the Commodities Futures Modernization Act of 2000, Pub. L. No. 106-554, app. E, § 407, 114 Stat. 2763A-365, 2763A-461 (codified in scattered sections of 7 U.S.C.)
Donald P. Morgan, Benjamin Iverson & Matthew Botsch, Subprime Foreclosures and the 2005 Bankruptcy Reform, FRBNY ECON. POL’Y REV., forthcoming, available at http://www.newyorkfed.org/research/epr/forthcoming/1102morg.pdf
ZOLTAN POZSAR ET AL., FED. RESERVE BANK OF N.Y., SHADOW BANKING 1–4 (2010), available at http://www.ny.frb.org/research/staff_reports/sr458.pdf
Steven L. Schwarcz, Rethinking the Disclosure Paradigm in a World of Complexity, 2004 U. ILL. L. REV. 1, 19
Gillian Tett, Credit Rating Groups Under Microscope, AUSTRALIAN, (Apr. 10, 2007, 12:00 AM), http://www.theaustralian.com.au/archive/business-old/credit-rating-groups-under-microscope/story-e6frg90x-1111113311477
Joseph R. Mason & Joshua Rosner, Where Did the Risk Go? How Misapplied Bond Ratings Cause Mortgage Backed Securities and Collateralized Debt Obligation Market Disruptions 3, 5, 18 (Soc. Sci. Research Network, Working Paper No. 1027475, 2007), http://ssrn.com/abstract=1027475
FIN. CRISIS INQUIRY COMM’N FINAL REPORT, supra note 4, at 444 (Peter J. Wallison, dissenting); TAYLOR, supra note 5; WALLISON, supra note 7; Pinto, supra note 7.
Ben S. Bernanke, Chairman, Fed. Reserve Sys., Speech at the Annual Meeting of the American Economic Association: Monetary Policy and the Housing Bubble (Jan. 3, 2010), available at http://www.federalreserve.gov/newsevents/speech/bernanke20100103a.htm; Glaeser et al., supra note 3, at 1–2.
FIN. CRISIS INQUIRY COMM’N FINAL REPORT, supra note 4, at 444 (Peter J. Wallison, dissenting)
Ben S. Bernanke, Chairman, Fed. Reserve Sys., Speech at the Annual Meeting of the American Economic Association: Monetary Policy and the Housing Bubble (Jan. 3, 2010), available at http://www.federalreserve.gov/newsevents/speech/bernanke20100103a.htm
Keys et al., Did Securitization Lead to Lax Screening?
Mian & Sufi, The Consequences of Mortgage Credit Expansion
Atif Mian & Amir Sufi, The Great Recession: Lessons from Microeconomic Data, 100 AM. ECON. REV: PAPERS & PROCEEDINGS 1, 2 (2010)
INSIDE MORTG. FIN., 2010 MORTGAGE MARKET STATISTICAL ANNUAL (2010) (Microsoft Excel supplemental files)
Anna Gelpern & Adam J. Levitin, Rewriting Frankenstein Contracts: Workout Prohibitions in Residential Mortgage-Backed Securities, 82 S. CAL. L. REV. 1075, 1080–87 (2009)
Kenneth A. Snowden, Mortgage Securitization in the United States: Twentieth Century Developments in Historical Perspective, in ANGLO-AMERICAN FINANCIAL SYSTEMS: INSTITUTIONS AND MARKETS IN THE TWENTIETH CENTURY 261, 261–64 (Michael D. Bordo & Richard Sylla eds., 1995)
William N. Goetzmann & Frank Newman, Securitization in the 1920’s (Nat’l Bureau of Econ. Research, Working Paper No. 15650, 2010)
Mark J. Flannery & W. Scott Frame, The Federal Home Loan Bank System: The “Other” Housing GSE, ECON. REV., Third Quarter 2006
12 U.S.C. §§ 1454(a)(2), 1717(b)(2) (2006)
Brent W. Ambrose & Arthur Warga, Measuring Potential GSE Funding Advantages, 25 J. REAL EST. FIN. & ECON. 129, 146 (2002)
Frank E. Nothaft, James E. Pearce & Stevan Stevanovic, Debt Spreads Between GSEs and Other Corporations, 25 J. REAL EST. FIN. & ECON. 151, 151 (2002)
Dawn Kopecki, Fannie, Freddie Have ‘Effective’ Guarantee, FHFA Says, BLOOMBERG (Oct. 23, 2008, 14:06 EDT), http://www.bloomberg.com/apps/news?pid=20601087&sid=aO5XSFgElSZA&refer=home
12 U.S.C. § 1719(e) (2006)
12 U.S.C. §§ 1454(a)(2), 1717(b)(2)
Bank of Am. Nat’l Trust & Sav. Assoc., SEC No-Action Letter, 1977 SEC No-Act. LEXIS 1343 (May 19, 1977)
GRETCHEN MORGENSON & JOSHUA ROSNER, RECKLESS ENDANGERMENT: HOW OUTSIZED AMBITION, GREED, AND CORRUPTION LED TO ECONOMIC ARMAGEDDON 48–50 (2011)
ANTHONY LEMBKE & PETER DIMARTINO, “B” AND “C” BORROWERS: A NEW FRONTIER IN THE NONAGENCY MARKET 8 (1994), available at http://www.greeradvisors.com/Research_files/B_and_C_Borrowers_-_A_New_Frontier_in_the_Nonagency_Market.pdf (citing 1992 deals)
Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.S.C. § 1735f-7a (2006)
Alternative Mortgage Transaction Parity Act of 1982, 12 U.S.C. § 3803(a)(3) (2006)
Adam J. Levitin, Hydraulic Regulation: Regulating Credit Markets Upstream, 26 YALE J. ON REG. 143, 154 (2009)
DAVID MURPHY, UNRAVELLING THE CREDIT CRUNCH 133 (2009)
MBS Basics, NOMURA FIXED INCOME RES. (Nomura, New York, N.Y.), Mar. 31, 2006, at 22 exhibit 12, http://www.securitization.net/pdf/Nomura/MBSBasics_31Mar06.pdf
OFFICE OF FED. HOUS. ENTER. OVERSIGHT, MORTGAGE MARKET NOTE 08-3, A PRIMER ON THE SECONDARY MORTGAGE MARKET (2008), available at http://www.fhfa.gov/webfiles/1242/MMNOTE083.pdf
Ricardo J. Caballero, The “Other” Imbalance and the Financial Crisis 13–14 (Nat’l Bureau of Econ. Research, Working Paper No. 15636, 2010), http://www.nber.org/papers/w1536.
Wells Fargo Asset Sec. Corp., Mortgage Pass-Through Certificates, Series 2003-2 (Form 424(b)(5)) (Feb. 27, 2003), available at http://www.secinfo.com/dsVsn.2h2.htm.
Manuel Adelino, Do Investors Rely Only on Ratings? The Case of Mortgage-Backed Securities 42 (Nov. 24, 2009) (unpublished manuscript), http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.156.989&rep=rep1&type=pdf.
Richard J. Rosen, The Role of Securitization in Mortgage Lending, CHI. FED LETTER (Fed. Reserve Bank of Chi., Chi., Ill.), Nov. 2007
Sunil Gangwani, MBS Structuring: Concepts and Techniques, SECURITIZATION CONDUIT, Autumn 1998, at 26, 33
Manus J. Clancy & Michael Constantino, III, Understanding Shifting Interest Subordination, in THE HANDBOOK OF NONAGENCY MORTGAGE-BACKED SECURITIES 39, 42 exhibit 4 (Frank J. Fabozzi et al. eds., 2d ed. 2000)
GARY B. GORTON, SLAPPED BY THE INVISIBLE HAND: THE PANIC OF 2007, at 87 (2010)
William W. Bratton & Michael L. Wachter, The Case Against Shareholder Empowerment, 158 U. PA. L. REV. 653, 719 n.198 (2010).
Federal Reserve Statistical Release H.15, available at http://www.federalreserve.gov/releases/h15/data.htm.
Michael Tucker, Adjustable-Rate and Fixed-Rate Mortgage Choice: A Logit Analysis, 4 J. REAL EST. RES. 81, 86 (1989).
Andrey Pavlov & Susan Wachter, Mortgage Put Options and Real Estate Markets, 38 J. REAL EST. FIN. & ECON. 89, 92 (2009).
Charles Himmelberg et al., Assessing High House Prices: Bubbles, Fundamentals and Misperceptions, J. ECON. PERSP., Fall 2005
Christopher Mayer et al., The Rise in Mortgage Defaults, J. ECON. PERSP., Winter 2009
Paul S. Calem et al., Implications of the Housing Market Bubble for Sustainable Homeownership, in THE AMERICAN MORTGAGE SYSTEM: CRISIS AND REFORM 87, 87 (Susan M. Wachter & Marvin M. Smith eds., 2011)
Selected Interest Rates (Daily)—H.15, BD. OF GOVERNORS OF THE FED. RESERVE SYS., http://www.federalreserve.gov/releases/h15/data.htm
Corporate Default and Recovery Rates, 1920–2008, MOODY’S GLOBAL CREDIT POL’Y (Moody’s Investors Serv., New York, N.Y.), Feb. 2009, at 4–5, available at http://www.moodys.com/sites/products/DefaultResearch/2007400000578875.pdf
MICHAEL LEWIS, THE BIG SHORT: INSIDE THE DOOMSDAY MACHINE 143 (2010)
FIN. CRISIS INQUIRY COMM’N FINAL REPORT
Dean Baker, East Asia’s Economic Revenge, GUARDIAN (U.K.), (Mar. 9, 2009, 12:00 EDT), http://www.guardian.co.uk/commentisfree/cifamerica/2009/mar/09/usa-useconomy
Robert J. Shiller, Understanding Recent Trends in House Prices and Homeownership, in HOUSING, HOUSING FINANCE, AND MONETARY POLICY 89, 89 (2007), available at http://www.econ.yale.edu/~shiller/pubs/understanding2007.pdf
Lawrence H. White, Federal Reserve Policy and the Housing Bubble, 29 CATO J. 115, 115–19 (2009)
James R. Hagerty, Who’s To Blame for the Housing Bubble?
WALL ST. J. DEV. BLOG (Nov. 16, 2009, 1:57 PM), http://blogs.wsj.com/developments/2009/11/16/whos-to-blame-for-the-housing-bubble (citing Tom Lawler, a housing economist, as positing 2002 as the start of the bubble)
Ironman, A Better Method of Detecting Housing Bubbles, SEEKING ALPHA (Feb. 25, 2010), http://seekingalpha.com/article/190753-a-better-method-of-detecting-housing-bubbles
Joseph E. Stiglitz, Symposium on Bubbles, J. ECON. PERSP., Spring 1990, at 13, 13
ROBERT J. SHILLER, IRRATIONAL EXUBERANCE (2d ed. 2005), http://www.econ.yale.edu/~shiller/data/Fig2-1.xls
S&P/Case–Schiller Housing Price Indices, supra note 1; U.S. BUREAU OF LABOR STATISTICS, RENT OF PRIMARY RESIDENCE.
Chris Mayer & Todd Sinai, Bubble Trouble? Not Likely, WALL ST. J., Sept. 19, 2005
Kristopher S. Gerardi et al., Reasonable People Did Disagree: Optimism and Pessimism About the U.S. Housing Market Before the Crash, in THE AMERICAN MORTGAGE SYSTEM: CRISIS AND REFORM
Andrey Pavlov & Susan Wachter, Subprime Lending and Real Estate Prices, 39 REAL EST. ECON. 1 (2011)
Hearing Before the Joint Economic Committee of Congress, June 9, 2005 “The Economic Outlook” (testimony of Alan Greenspan, Chairman, Board of Governors of the Federal Reserve System)
Hearing Before the Joint Economic Committee of Congress, Oct. 20, 2005 “The Economic Outlook” (testimony of Ben S. Bernanke, Chairman, President’s Council of Economic Advisers)
Ernan Haruvy et al., Traders’ Expectations in Asset Markets: Experimental Evidence, 97 AM. ECON. REV. 1901, 1901 (2007)
Randal O’Toole, How Urban Planners Caused the Housing Bubble, POL’Y ANALYSIS (Cato Inst., Wash., D.C.), Oct. 1, 2009
Edward L. Glaeser & Joseph Gyourko, Arbitrage in Housing Markets, in HOUSING MARKETS AND THE ECONOMY: RISK, REGULATION, AND POLICY 113, 124 (Edward L. Glaeser and John M. Quigley eds., 2009)
Richard K. Green et al., Metropolitan-Specific Estimates of the Price Elasticity of Supply of Housing, and Their Sources, 95 AM. ECON. REV. 334, 336–37 (2005)
FIN. CRISIS INQUIRY COMM’N, PRELIMINARY STAFF REPORT: THE COMMUNITY REINVESTMENT ACT AND THE MORTGAGE CRISIS 6 (2010)
Neil Bhutta & Glenn B. Canner, Did the CRA Cause the Mortgage Market Meltdown?, COMMUNITYDIVIDEND (Fed. Reserve Bank of Minn., Minneapolis, Minn.), Mar. 1, 2009, available at http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=4136
Elizabeth Laderman & Carolina Reid, CRA Lending During the Subprime Meltdown, in REVISITING THE CRA: PERSPECTIVES ON THE FUTURE OF THE COMMUNITY REINVESTMENT ACT 115, 124 (Prabal Chakrabarti et al. eds., 2009), available at http://www.frbsf.org/publications/community/cra/revisiting_cra.pdf
Memorandum from Glenn Canner & Neil Bhutta to Sandra Braunstein, Dir., Consumer & Cmty. Affairs Div., Bd. of Governors of the Fed. Reserve Sys. 3 (Nov. 21, 2008), available at http://www.federalreserve.gov/newsevents/speech/20081203_analysis.pdf
Ellen Seidman, No, Larry, CRA Didn’t Cause the Sub-Prime Mess, LADDER BLOG (Apr. 15, 2008, 9:55 AM), http://www.newamerica.net/blog/asset-building/2008/no-larry-cra-didn-t-cause-sub-prime-mess-3210.
Michael S. Barr, Credit Where It Counts: The Community Reinvestment Act and Its Critics, 80 N.Y.U. L. REV. 513, 517 (2005)
12 U.S.C. § 1831u(b)(3) (2006)
12 U.S.C. § 1831y
12 U.S.C> § 1843(l)(2)
Robert B. Avery et al., The 2007 HMDA Data, FED. RES. BULL. (Bd. of Governors of the Fed. Reserve Sys., Wash., D.C.), Dec. 2008
12 U.S.C. §§ 2801–2811 (2006)
12 C.F.R. §§ 203.4(a)(12)–(13)
15 U.S.C. § 1602(aa) (2006)
12 C.F.R. § 226.32(a) (2011)
Robert B. Avery & Kenneth P. Brevoort, The Subprime Crisis: Is Government Housing Policy To Blame? 15–76 (Soc. Sci. Research Network, Working Paper No. 1726192, 2011), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1726192.
Joseph Gyourko, Understanding Commercial Real Estate: Just How Different from Housing Is It? (Nat’l Bureau of Econ. Research, Working Paper No. 14708, 2009), http://www.nber.org/papers/w14708
Adam J. Levitin & Susan M. Wachter, The Commercial Real Estate Bubble (Soc. Sci. Research Network, Working Paper No. 1978264, 2012), http://ssrn.com/abstract=1978264
Jennifer Roback, Wages, Rents, and the Quality of Life, 90 J. POL. ECON. 1257 (1982)
Sherwin Rosen, Wage-Based Indexes of Urban Quality of Life, in CURRENT ISSUES IN URBAN ECONOMICS 74, 74–102 (Peter Mieszkowski & Mahlon Straszheim eds., 1979)
Moody’s/REAL Commercial Property Price Index (CPPI), MIT CENTER FOR REAL EST., http://web.mit.edu/cre/research/credl/rca.html
Peter J. Wallison, Op-Ed., The Price for Fannie and Freddie Keeps Going Up, WALL ST. J. (Dec. 29, 2009, 8:18 PM), http://online.wsj.com/article/SB10001424052748703278604574624681873427574.html.
Housing and Community Development Act of 1992, Pub. L. No. 102-550, § 1331, 106 Stat. 3672, 3956 (codified at 12 U.S.C. § 4561 (2006))
Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, § 1128(b), 122 Stat. 2654, 2696 (codified at 12 U.S.C. § 4561 (2006))
Xudong An & Raphael W. Bostic, GSE Activity, FHA Feedback, and Implications for the Efficacy of the Affordable Housing Goals, 36 J. REAL EST. FIN. & ECON. 207, 207–08 (2008)
12 U.S.C. § 4566(c)(1) (Supp. III 2010)
12 U.S.C. §§ 4562–4565 (Supp. III 2010)
24 C.F.R. § 81.2 (2011)
Interim Housing Goals, 58 Fed. Reg. 53,048 (Oct. 13, 1993)
Continuation of Federal Home Loan Mortgage Corporation and Federal National Mortgage Association Housing Goals, 59 Fed. Reg. 61,504 (proposed Nov. 30, 1994) (to be codified at 24 C.F.R. pt. 81)
The Secretary of HUD’s Regulation of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), 60 Fed. Reg. 61,846 (proposed Dec. 1, 1995) (to be codified at 24 C.F.R. pt. 81)
HUD’s Regulation of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), 65 Fed. Reg. 65,044 (proposed Oct. 31, 2000) (to be codified at 24 C.F.R. pt. 81)
HUD’s Housing Goals for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) for the Years 2005–2008 and Amendments to HUD’s Regulation of Fannie Mae and Freddie Mac, 69 Fed. Reg. 63,580 (proposed Nov. 2, 2004) (to be codified at 24 C.F.R. pt. 81)
U.S. DEP’T OF HOUS. & URBAN DEV., OVERVIEW OF THE GSES’ HOUSING GOAL PERFORMANCE, 1996–2003 (2005), available at http://www.huduser.org/Datasets/GSE/gse2003.pdf
Harold L. Bunce & Randall M. Scheessele, The GSEs’ Funding of Affordable Loans 4 (U.S. Dep’t of Hous. & Urban Dev., Working Paper No. HF-001, 1996), available at http://www.huduser.org/Publications/pdf/gsewp.pdf
Harold L. Bunce, The GSEs’ Funding of Affordable Loans: A 2000 Update 30 (U.S. Dep’t of Hous. & Urban Dev., Working Paper No. HF-013, 2002), available at http://www.huduser.org/Publications/pdf/workpapr13.pdf
Paul B. Manchester, Characteristics of Mortgages Purchased by Fannie Mae and Freddie Mac: 1996–97 Update 5 (U.S. Dep’t of Hous. & Urban Dev., Working Paper No. HF-006, 1998), available at http://www.huduser.org/publications/pdf/wkp_006.pdf.
Xudong An & Raphael W. Bostic, Policy Incentives and the Extension of Mortgage Credit: Increasing Market Discipline for Subprime Lending, 28 J. POL’Y ANALYSIS & MGMT. 340, 345–46 (2009)
David Listokin & Elvin K. Wyly, Making New Mortgage Markets: Case Studies of Institutions, Home Buyers, and Communities, 11 HOUSING POL’Y DEBATE 575, 637 (2000)
Kenneth Temkin et al., The Impact of Secondary Mortgage Market Guidelines on Affordable and Fair Lending: A Reconnaissance from the Front Lines, REV. BLACK POL. ECON., Fall 2000, at 29, 35.
See Stuart A. Gabriel & Stuart S. Rosenthal, Government-Sponsored Enterprises, the Community Reinvestment Act, and Home Ownership in Targeted Underserved Neighborhoods, in HOUSING MARKETS AND THE ECONOMY, supra note 99, at 202, 205
Brent W. Ambrose & Thomas G. Thibodeau, Have the GSE Affordable Housing Goals Increased the Supply of Mortgage Credit?, 34 REGIONAL SCI. & URB. ECON. 263, 271 (2004)
An & Bostic, supra note 119, at 208; An & Bostic, supra note 127, at 346; Raphael W. Bostic & Stuart A. Gabriel, Do the GSEs Matter to Low-Income Housing Markets? An Assessment of the Effects of the GSE Loan Purchase Goals on California Housing Outcomes, 59 J. URB. ECON. 458, 474 (2006)
24 C.F.R. § 81.16(c)(2) (2011).
Joshua Brockman, With Freddie’s Help, Big Lenders Charge into Subprime Business, AM. BANKER, Sept. 10, 1999, 1999 WLNR 2765773
William K. Black, Fannie and Freddie Fantasies, NEW ECON. PERSP. BLOG (Dec. 29, 2011), http://neweconomicperspectives.blogspot.com/2011/12/fannie-and-freddie-fantasies.html
FED. HOUS. FIN. AGENCY, CONSERVATOR’S REPORT ON THE ENTERPRISES’ FINANCIAL PERFORMANCE: THIRD QUARTER 2010, at 4–5 (2010), available at http://www.fhfa.gov/webfiles/19585/Conservator%27s_Report112910.ppd.
John B. Taylor, Discretion Versus Policy Rules in Practice, 39 CARNEGIE–ROCHESTER CONF. SERIES ON PUB. POL’Y 195, 202 (1993).
John B. Taylor, Housing and Monetary Policy 2–3 (Nat’l Bureau of Econ. Research, Working Paper No. 13682, 2007), http://www.nber.org/papers/w13682.
Marco Del Negro & Christopher Otrok, 99 Luftballons: Monetary Policy and the House Price Boom Across U.S. States, 54 J. MONETARY ECON. 1962, 1965 (2007)
Marek Jarociński & Frank R. Smets, House Prices and the Stance of Monetary Policy, 90 FED. RES. BANK OF ST. LOUIS REV. 339, 362 (2008)
Edward L. Glaeser, Joshua Gottlieb & Joseph Gyourko, Did Credit Market Policies Cause the Housing Bubble?, POL’Y BRIEFS (Rappaport Inst. & Taubman Ctr., Cambridge, Mass.), May 2010, at 1, 4, http://www.hks.harvard.edu/var/ezp_site/storage/fckeditor/file/pdfs/centers-programs/centers/taubman/PB_housing_2010_final.pdf.
DAVID MIN, CTR. FOR AM. PROGRESS, TRUE NORTH: THE FACTS ABOUT THE CANADIAN MORTGAGE BANKING SYSTEM 1 (2010), http://www.americanprogress.org/issues/2010/08/pdf/canadian_banking.pdf.
Richard Green et al., Housing Finance in Developed Countries in a Time of Turmoil (Aug. 2010) (unpublished paper)
Maurice Obstfeld & Kenneth Rogoff, Global Imbalances and the Financial Crisis: Products of Common Causes, Oct. 2009, at http://www.economics.harvard.edu/faculty/rogoff/files/Global_Imbalances_and_Financial_Crisis.pdf
Claudio Borio & Piti Disyatat, Global imbalances and the financial crisis: Link or no link? Bank for Int’l Settlements Working Paper No. 346, May 2011
Bernanke, International Capital Flows, supra note 6, at 7–8. See also Gary B. , Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007 (May 11-13, 2009) (unpublished manuscript), available at http://www.frbatlanta.org/news/Conferen/09fmc/gorton.pdf (discussing investor demand for “informationally insensitive” financial assets)
Lloyd Blankfein, Do Not Destroy the Essential Catalyst of Risk, FIN. TIMES (U.K.) (Feb. 8, 2009, 16:53), http://www.ft.com/intl/cms/s/0/0a0f1132-f600-11dd-a9ed-0000779fd2ac.html#axzz1dRTrq3ev.
Susan M. Wachter, The Ongoing Financial Upheaval: Understanding the Sources and Way Out 6–7 (Univ. of Pa. Law Sch. Inst. for Law & Econ., Research Paper No. 09-30, 2009), http://ssrn.com/abstract=1464791.
Jack Favilukis, Sydney C. Ludvigson & Stijn Van Nieuwerburgh, The Macroeconomic Effects of Housing Wealth, Housing Finance, and Limited Risk-Sharing in General Equilibrium 1–2 (Soc. Sci. Research Network, Working Paper No. 1602163, 2011), http://ssrn.com/abstract=1602163
Amir E. Khandani, Andrew W. Lo & Robert C. Merton, Systemic Risk and the Refinancing Ratchet Effect 1–3 (Nat’l Bureau of Econ. Research, Working Paper No. 15362, 2009)
Xavier Gabaix & David Laibson, Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets, 121 Q.J. ECON. 505, 506–07 (2006)
Marisa J. Mazzotta & James J. Opaluch, Decision Making When Choices Are Complex: A Test of Heiner’s Hypothesis, 71 LAND ECON. 500, 513 (1995)
Xavier Gabaix & David Laibson, Competition and Consumer Confusion 1 (Apr. 30, 2004) (unpublished paper presented to the 2004 N. Am. Summer Meeting of the Econometric Soc’y), available at http://www.google.com/url?sa=t&rct=j&q=xavier%20gabaix%20%26%20david%20laibson%2C%20competition%20and%20consumer%20confusion&source=web&cd=2&ved=0CDEQFjAB&url=http%3A%2F%2Fciteseerx.ist.psu.edu%2Fviewdoc%2Fdownload%3Fdoi%3D10.1.1.167.8583%26rep%3Drep1%26type%3Dpdf&ei=KlQQT7KvL6ns0gHIoYCcAw&usg=AFQjCNGiCVxCaAKE1EoDqnYxB5fNt30r0w&sig2=pwmkuAYbhiinAg0TNKvXaw
Adam B. Ashcraft & Til Schuermann, Understanding the Securitization of Subprime Mortgage Credit, 2 FOUND. & TRENDS FIN. 191, 203–05, 212–13 (2006)
Oren Bar-Gill, The Law, Economics and Psychology of Subprime Mortgage Contracts, 94 CORNELL L. REV. 1073, 1080–83 (2009)
15 U.S.C. § 78u-4(b)(1) (2006)
. § 78u-4(b)(2)(B)
DEBBIE GRUENSTEIN BOCIAN ET AL., CTR. FOR RESPONSIBLE LENDING, UNFAIR LENDING: THE EFFECT OF RACE AND ETHNICITY ON THE PRICE OF SUBPRIME MORTGAGES 21 (2006), available at http://www.responsiblelending.org/mortgage-lending/research-analysis/rr011-Unfair_Lending-0506.pdf.
Howell E. Jackson & Laurie Burlingame, Kickbacks or Compensation: The Case of Yield Spread Premiums, 12 STAN. J.L. BUS. & FIN. 289, 310–11 (2007)
12 C.F.R. § 226.36(e) (2012)
JAMES GRANT, MR. MARKET MISCALCULATES: THE BUBBLE YEARS AND BEYOND 170 (2008).
Claire A. Hill, Securitization: A Low-Cost Sweetener for Lemons, 74 WASH. U. L.Q. 1061, 1065–66 (1996)
George A. Akerlof, The Market for “Lemons”: Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488, 495 (1970)
Andrey Pavlov & Susan M. Wachter, The Inevitability of Marketwide Underpricing of Mortgage Default Risk, 34 REAL EST. ECON. 479, 494 (2006)
Todd Davenport, What’s Behind Wall Street Players’ Mortgage Deals, AM. BANKER (Aug. 14, 2006, 1:00 AM), www.americanbanker.com/issues/171_158/-286097-1.html
Kevin Donovan, The Freddie Mac T-Series Wrap: A Service or Disservice to Mortgage-Related ABS?, ASSET SECURITIZATION REPORT, June 11, 2001, http://www.highbeam.com/doc/1G1-75428784.html
Patrick Sheehy, Subprime Lending Moves to More Solid Ground, ALLBUSINESS.COM, http://www.allbusiness.com/finance/3594590-1.html#ixzz1iK0yJzkR (last visited Jan. 13, 2012).
THORSTEIN VEBLEN, THE THEORY OF BUSINESS ENTERPRISE 105-106, 112-113 (1904)
Nobuhiro Kiyotaki & John Moore, Credit Cycles, 105 J. POL. ECON. 211 (1997)
Stephen A. Ross, The Arbitrage Theory of Capital Asset Pricing, 13 J. ECON. THEORY 341, 341–43 (1976).
Efraim Benmelech & Jennifer Dlugosz, The Alchemy of CDO Credit Ratings, 56 J. MONETARY ECON. 617 (2009)
John C. Coffee, Jr., Ratings Reform: The Good, the Bad, and the Ugly, 1 HARV. BUS. L. REV. 231, 234 (2011)
); Frank Partnoy, The Siskel and Ebert of Financial Markets?: Two Thumbs Down for the Credit Rating Agencies, 77 WASH. U. L.Q. 619, 711 (1999)
Frank Partnoy, Overdependence on Credit Ratings Was a Primary Cause of the Crisis 11 (Univ. of San Diego Sch. of Law, Research Paper No. 09-015, 2009), http://papers.ssrn.com/sol3/papers.cfm?abstractid=1430653
FITCH RATINGS, DEFINITIONS OF RATINGS AND OTHER FORMS OF OPINION 9–10 (2011), available at http://www.fitchratings.com/web_content/ratings/fitch_ratings_definitions_and_scales.pdf.
MOODY’S INVESTORS SERV., RATING SYMBOLS AND DEFINITIONS 4 (2011), available at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004
Paul Muolo, Fannie’s Mudd Is Wary of Exotics, NAT’L MORTGAGE NEWS (July 24, 2006, 1:00 AM), http://www.nationalmortgagenews.com/nmn_issues/30_41/-443044-1.html
Fed. Nat’l Mortg. Assoc., Annual Report (Form 10-K) 120 tbl.34 (Dec. 31, 2006), available at http://www.fanniemae.com/ir/pdf/sec/2006/form10k_120606.pdf.
Jerome S. Fons, Rating Competition and Structured Finance, J. STRUCTURED FIN., Fall 2008, at 7, 11–14
Joseph R. Mason, The (Continuing) Information Problems in Structured Finance, J. STRUCTURED FIN., Spring 2008, at 7, 7–11
Mason & Rosner, supra note 19, at 8–15; Matthew Richardson & Lawrence J. White, The Rating Agencies: Is Regulation the Answer?, in RESTORING FINANCIAL STABILITY: HOW TO REPAIR A FAILED SYSTEM 101, 104–15 (Viral V. Acharya & Matthew Richardson eds., 2009)
(quoting The Structured Finance Rating Process, TAIWAN RATINGS, http://www.taiwanratings.com/en/criteria/SF_ratingprocess.asp (last visited Jan. 13, 2012)
Gretchen Morgenson & Louise Story, Rating Agency Data Aided Wall Street in Deals, N.Y. TIMES, Apr. 24, 2010, at A1, available at http://www.nytimes.com/2010/04/24/business/24rating.html?dbk.
GARY SHORTER & MICHAEL V. SEITZINGER, CONG. RESEARCH SERV., R40613, CREDIT RATING AGENCIES AND THEIR REGULATION 5–6, 11 (2009)
Gretchen Morgenson, Debt Watchdogs: Tamed or Caught Napping?, N.Y. TIMES, Dec. 7, 2008, at A1, available at http://www.nytimes.com/2008/12/07/business/07rating.html?pagewanted=all; Joshua D. Coval et al., The Economics of Structured Finance 4 (Harvard Bus. Sch., Working Paper 09-060, 2008), available at http://www.hbs.edu/research/pdf/09-060.pdf.
Kia Dennis, The Ratings Game: Explaining Rating Agency Failures in the Build Up to the Financial Crisis, 63 U. MIAMI L. REV. 1111, 1137–38 (2009), available at http://www.sec.gov/news/studies/2008/craexamination070808.pdf
Patrick Bolton et al., The Credit Ratings Game 13–15 (Nat’l Bureau of Econ. Research, Working Paper No. 14712, 2009).
Vasiliki Skreta & Laura Veldkamp, Ratings Shopping and Asset Complexity: A Theory of Ratings Inflation 16–20 (Soc. Sci. Research Network, Working Paper No. 1295503, 2008), available at http://ssrn.com/abstract=1295503.
Andrew Cohen, Rating Shopping in the CMBS Market (Sept. 2011) (unpublished paper), http://www.federalreserve.gov/events/conferences/2011/rsr/papers/Cohen.pdf
Timothy J. Riddiough & Jun Zhu, Shopping, Relationships, and Influence in the Market for Credit Ratings (Nov. 2009) (unpublished paper), http://www.hhs.se/df/seminarsworkshops/documents/riddiough.pdf
Richard Stanton & Nancy Wallace, CMBS Subordination, Ratings Inflation, and Regulatory-Capital Arbitrage (July 11, 2011) (unpublished paper), http://faculty.haas.berkeley.edu/stanton/papers/pdf/cmbx.pdf
FIN. CRISIS INQUIRY COMM’N FINAL REPORT, supra note 4, at 417–18 (Keith Hennessey, Douglas Holtz-Eakin & Bill Thomas, dissenting)
Bernanke, International Capital Flows, supra note 6, at 1, 22; see also YVES SMITH, ECONNED: HOW UNENLIGHTENED SELF INTEREST UNDERMINED DEMOCRACY AND CORRUPTED CAPITALISM 209–10 (2010)
Larry Cordell, Yilin Huang, & Meredith Williams, Collateral Damage: Sizing and Assessing the Subprime CDO Crisis, Fed. Reserve Bank of Phila. Working Paper No. 11-30, August 2011, at http://www.philadelphiafed.org/research-and-data/publications/working-papers/2011/wp11-30.pdf at 10
Mark H. Adelson & David P. Jacob, The Subprime Problem: Causes and Lessons, J. STRUCTURED FIN., Spring 2008, at 12, 12–17
Anna Katherine Barnett-Hart, The Story of the CDO Market Meltdown: An Empirical Analysis 10–11 (Mar. 19, 2009) (unpublished B.A. thesis, Harvard College), available at http://www.hks.harvard.edu/m-rcbg/students/dunlop/2009-CDOmeltdown.pdf
Global CDO Issuance, SEC. INDUSTRY & FIN. MARKETS ASS’N, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CBsQFjAA&url=http%3A%2F%2Fwww.sifma.org%2Fuploadedfiles%2Fresearch%2Fstatistics%2Fstatisticsfiles%2Fsf-global-cdo-issuance-sifma.xls&ei=xNCqTqfHNoLg0QHopNikDw&usg=AFQjCNE8O6pNS8OsquCdxJ0LzWPxQtT9YA&sig2=vGcCiG7U8Hu_EZwa2CYQzw (last visited Jan. 13, 2012)
Yongheng Deng et al., CDO Market Implosion and the Pricing of CMBS and Sub-Prime ABS, at 4, 28 fig.3 (Apr. 2008) (unpublished article), available at http://www.reri.org/research/article_pdf/wp150.pdf.
Asset-Backed Alert, ABS Database.
Richard Herring & Susan Wachter, Bubbles in Real Estate Markets 4 (Zell/Lurie Real Estate Ctr., Working Paper No. 402, 2002), available at http://realestate.wharton.upenn.edu/newsletter/bubbles.pdf.
RESTATEMENT (THIRD) OF PROP. (SERVITUDES) § 8.3 cmt. b (2000).
J. Michael Harrison & David M. Kreps, Speculative Investor Behavior in a Stock Market with Heterogeneous Expectations, 92 Q.J. ECON. 323, 324–25 (1978)
Charles M. Jones & Owen A. Lamont, Short-Sale Constraints and Stock Returns, 66 J. FIN. ECON. 207, 209 (2002)
Edward M. Miller, Risk, Uncertainty, and Divergence of Opinion, 32 J. FIN. 1151, 1154 (1977)
José A. Scheinkman & Wei Xiong, Overconfidence and Speculative Bubbles, 111 J. POL. ECON. 1183, 1208 (2003)
Susan Wachter, Procyclicality and Lending Standards Through-the-Cycle (Aug. 2010) (unpublished paper)
VINOD KOTHARI, SECURITIZATION: THE FINANCIAL INSTRUMENT OF THE FUTURE 524–25 (2006)
David Mengle, Credit Derivatives: An Overview, ECON. REV., Fourth Quarter 2007, at 1, 1–2.
Douglas J. Lucas, Laurie S. Goodman & Frank J. Fabozzi, Collateralized Debt Obligations and Credit Risk Transfer 7 fig.3 (Yale Int’l Ctr. for Fin., Working Paper No. 07-06, 2007), available at http://ssrn.com/abstract=997276
Manuel Arrive & Pablo Mazzini, Outlook on the CLO Manager Landscape: The Features of the Survivors, HEDGE FUND J., Oct. 2008, http://www.thehedgefundjournal.com/magazine/200810/research/outlook-on-the-clo-manager-landscape-.php.
Kate Birchall, Cash Flow CDOs, in ASSET SECURITISATION AND SYNTHETIC STRUCTURES: INNOVATIONS IN THE EUROPEAN CREDIT MARKETS 179, 189 (Rick Watson & Jeremy Carter eds., 2006).
GILLIAN TETT, FOOL’S GOLD: HOW THE BOLD DREAM OF A SMALL TRIBE AT J.P. MORGAN WAS CORRUPTED BY WALL STREET GREED AND UNLEASHED A CATASTROPHE 124–25 (2009).
Jesse Eisinger & Jake Bernstein, The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going, PROPUBLICA (Apr. 9, 2010, 12:59 PM), http://www.propublica.org/article/all-the-magnetar-trade-how-one-hedge-fund-helped-keep-the-housing-bubble.
Erik F. Gerding, Credit Derivatives, Leverage, and Financial Regulation’s Missing Macroeconomic Dimension, 8 BERKELEY BUS. L.J. 102, 113-114 (2011)
Bernanke, International Capital Flows, supra note 6, at 7–8. See also Gorton, Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007 (May 11-13, 2009) (unpublished manuscript), available at http://www.frbatlanta.org/news/Conferen/09fmc/gorton.pdf (discussing investor demand for “informationally insensitive” financial assets).
Ingo Fender & Martin Scheicher, The ABX: How Do the Markets Price Subprime Mortgage Risk?, BIS Q. REV., Sept. 2008, at 67, 68
CDS IndexCo and Markit Announce Roll of the ABX.HE Indices, BUS. WIRE (Jan. 19, 2007, 8:00 AM), http://www.businesswire.com/news/home/20070119005133/en/CDS-IndexCo-Markit-Announce-Roll-ABX.HE-Indices
Press Release, MarkIt, Index Methodology for the ABX.HE Index for the Sub-Prime Home Equity Sector (“ABX.HE Index Rules”) (Sept. 5, 2008), http://www.markit.com/assets/en/docs/products/data/indices/structured-finance/ABX%20rules%20revised%209-9-08.pdf.
The CMBX: The Future Is Here, NOMURA FIXED INCOME RES. (Nomura, New York, N.Y.), Mar. 23, 2006, at 1, http://www.securitization.net/pdf/Nomura/CMBX_23Mar06.pdf
Alan Todd & Yuriko Iwai, An Introduction to the CMBX.NA Index and Single-Name CMBS CDS, CMBS WORLD (CRE Fin. Council, New York, N.Y.), Spring 2006, at 29, 29, http://www.crefc.org/assetlibrary/F1F85F3A-D0A5-4EF6-AACD-D73C7ADEF496/994a8967a1614f9cb3da761b5d8818602.pdf
CMBX Draws Fire for Lack of Transparency, COM. MORTGAGE ALERT (Mar. 14, 2008), http://www.cmalert.com/headlines-search.php?s=CMBX+Index+Draws+Fire+for+Lack+of+Transparency
Trade Group Urges More CMBX Disclosure, COM. MORTGAGE ALERT, (Mar. 28, 2008), http://www.cmalert.com/headlines-search.php?s=Trade+Group+Urges+More+CMBX+Disclosure.
John Geanakoplos, Solving the Present Crisis and Managing the Leverage Cycle, FRBNY ECON. POL’Y REV., August 2010, at 101, 110–11, available at http://www.ny.frb.org/research/epr/10v16n1/1008gean.pdf.
Jerome S. Fons, Shedding Light on Subprime RMBS, J. STRUCTURED FIN., Spring 2009, at 81, 89.
Karl E. Case, Jr. et al., Index-Based Futures and Options Markets in Real Estate, J. PORTFOLIO MGMT., Winter 1993, at 83, 84
Michael C. Lovell & Robert C. Vogel, A CPI-Futures Market, 81 J. POL. ECON. 1009, 1009 (1973)
Mark J. Powers, Does Futures Trading Reduce Price Fluctuations in the Cash Markets?, 60 AM. ECON. REV. 460, 464 (1970)
Richard Stanton & Nancy Wallace, ABX.HE Indexed Credit Default Swaps and the Valuation of Subprime MBS 5 (Feb. 15, 2008) (unpublished paper), available at http://escholarship.org/uc/item/5s75x0ns#page-1.
Gary Gorton, Information, Liquidity, and the (Ongoing) Panic of 2007, 99 AM. ECON. REV. 567, 572 (2009).
Gary Gorton & Andrew Metrick, The Run on Repo and the Panic of 2007–2008, at 8 (Mar. 9, 2009) (unpublished paper), available at http://econ-www.mit.edu/files/3918.
Gary Gorton & Andrew Metrick, Securitized Banking and the Run on Repo 10 n.12 (Yale Int’l Ctr. for Fin., Working Paper No. 09-14, 2010), http://ssrn.com/abstract=1440752
Mike McNamee, Lewis S. Ranieri: Your Mortgage Was His Bond, BLOOMBERG BUSINESSWEEK (Nov. 29, 2004), http://www.businessweek.com/magazine/content/04_48/b3910023_mz072.htm
Lewis Ranieri, Comments at the Department of Treasury and Department of Housing and Urban Development’s Conference on the Future of Housing Finance (Aug. 17, 2010)
Reshmaan N. Hussam et al., Thar She Blows: Can Bubbles Be Rekindled with Experienced Subjects?, 98 AM. ECON. REV. 924, 924 (2008)
Asset-Backed Securities, 75 Fed. Reg. 23,328 (proposed May 3, 2010) (to be codified at 17 C.F.R. pts. 200, 229–30, 232, 239–40, 243, 249)
75 Fed. Reg. at 23,361, 23,368.
Thomas W. Merrill & Henry E. Smith, The Property/Contract Interface, 101 COLUM. L. REV. 773, 777 (2001)
Thomas W. Merrill & Henry E. Smith, Optimal Standardization in the Law of Property: The Numerus Clausus Principle, 110 YALE L.J. 1, 26–27 (2000)
Joshua Fairfield, The Cost of Consent: Optimal Standardization in the Law of Contract, 58 EMORY L.J. 1401, 1404 (2009)
Joshua A.T. Fairfield, The Search Interest in Contract, 92 IOWA L. REV. 1237, 1256–57 (2007)
JAMES VICKERY & JOSHUA WRIGHT, FED. RESERVE BANK OF N.Y., TBA TRADING AND LIQUIDITY IN THE AGENCY MBS MARKET 12 (2010), available at http://www.ny.frb.org/research/staff_reports/sr468.pdf
Dodd–Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (codified in scattered sections of the U.S.C.)
15 U.S.C. § 78o-11(e)(4)(B) (Supp. IV 2011)
Adam J. Levitin, Andrey D. Pavlov & Susan M. Wachter, Dodd–Frank Act and Housing Finance: Can It Restore the Private Risk Capital to the Securitization Market?, 29 YALE J. ON REG. (forthcoming 2012)