What's Wrong with Money? by Michael Ashton

Author:Michael Ashton [Ashton, Michael]
Language: eng
Format: epub
ISBN: 9781119191162
Publisher: Wiley
Published: 2016-01-19T00:00:00+00:00

Central Banking after the Crisis

By late October, although the worst was behind us in terms of the stability of the banking system, the worst was clearly yet ahead in the performance of the economy. The implosion of the housing market, with all of the leveraged “investors” who were suddenly bankrupt, ensured that that mortgage-backed securities market would be a mess for a while. Homeowners who suddenly found themselves deep underwater in their loan-to-value also were clearly at greater risk to default on their mortgages. The term jingle mail entered the popular lexicon. Jingle mail is when a homeowner who owes far more on his or her house than it is worth defaults by mailing the house keys to the lender. “Take it, it's yours.” While this probably didn't literally happen all that often, the point of the phrase is that at some level defaulting on a mortgage arguably becomes an economically rational thing to do. Figure 8.1 shows that the delinquency rate on single-family residential mortgages by early 2010 had risen to seven times its pre-crisis level.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.