The United States: An Economic Balance Sheet Analysis

De Koning, Kees (2012): The United States: An Economic Balance Sheet Analysis.

Abstract

The U.S financial crisis started in October 2005. The level of new home starts would have replaced the total owner occupied housing stock in 37 years. Much faster than desirable. Mortgage interest rates also went up in same month. In 2006 mortgage lending went on unabated, but housing values did not keep pace. Securitisation led to the well known liquidity crisis in 2008.The impression was given that investors could get out of mortgage risks on a daily basis. Banking crisis, economic crisis and government deficit funding crisis followed. The paper sets out why the crises were foreseeable, avoidable but are also solvable in the short term.

• Item Type: MPRA Paper
• Language: English
• Keywords: Balance Sheet of Households and Nonprofit Organizations;Individual households assets and liabilities and net worth;U.S mortgage markets; mortgage products; mortgage debts; consumer credits;types of households;banking roles;Fannie Mae and Freddy Mac; unemployment; country profit; banking supervisors;economic easing; econsystem
• Subjects: G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency ; Event Studies ; Insider Trading; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; G - Financial Economics > G2 - Financial Institutions and Services; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O51 - U.S. ; Canada; E - Macroeconomics and Monetary Economics > E0 - General > E00 - General

References

http://www.federalreserve.gov/releases/z1/current/z1r-5.pdf

http://en.wikipedia.org/wiki/File:Case-Shiller_index.png

http://www.globalsecuritisation.com/08_gbp/gbp_gssf08_022_031_db_us_subprm.pdf

http://mpra.ub.uni-muenchen.de/42580/