tag:blogger.com,1999:blog-5043138489010794057.post3081128900914813825..comments2024-03-27T15:57:09.192+05:30Comments on Urbanomics: What caused the sub-prime crisis?Urbanomicshttp://www.blogger.com/profile/16956198290294771298noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5043138489010794057.post-90366783628756390932010-02-07T08:42:22.564+05:302010-02-07T08:42:22.564+05:30Dylan, I could not agree more. the sub-prime bubbl...Dylan, I could not agree more. the sub-prime bubble was inflating all through the decade, and the failure of two Bear Stearns hedge funds in June-July 2007 was an early symptom. <br /><br />However, in Bear's collapse, I was referring more to the classic Minsky moment, when the momentum suddenly turned and the market panic started to build up to a crescendo. and i do think, Bear's collapse was a significant minsky moment, if there was one. <br /><br />in fact, apart from the bear stearns collpase, the nationalization of Northern Rock in February 2008 by the British government was another defining global financial market event that may have contributed towards decisively reversing the momentum.Urbanomicshttps://www.blogger.com/profile/16956198290294771298noreply@blogger.comtag:blogger.com,1999:blog-5043138489010794057.post-17218739476748290652010-02-07T07:38:52.126+05:302010-02-07T07:38:52.126+05:30Regarding your assertion that the March 08 collaps...Regarding your assertion that the March 08 collapse/bailout of Bear Stearns - this event, while obviously a major domino on the way to the financial crisis - was not a cause of the subprime crisis. The subprime crisis was going on LONG before Bear collapsed. Indeed, Bear Stearns itself - through its own low underwriting standards and its role as a major securitizer of junk mortgages - certainly helped to cause the subprime crisis which, in turn, helped cause Bear Stearns to fail. But the subprime lending industry collapsed during the first half of 2007 and securitization and sales of subprime mortgages was done by the second half of 07. Just my two cents. Brett Sherman, editor, The Wall Street Law Blog www.wallstreetlaw/typepad.com/.Dylan Balehttps://www.blogger.com/profile/04650600114686514308noreply@blogger.com