It's not poor credit rating, it's high credit rating Other credits are for example 2%, 3% but the subprime is the highest one 10 until 12%. Buy Summary: The Subprime Solution: Review and Analysis of Robert J. Shiller's Book: Read Books Reviews - Amazon.com Bailouts: Cui bono and who will suffer. Back to behavior finance that still heavily relying on behavior economics that it is hard to predict, as its fluctuate to the effect of stock and bonds, rates, and exchange monetary. We need to remove this incentive for. He calls for an aggressive response--a restructuring of the institutional foundations of the financial system that will not only allow people once again to buy and sell homes with confidence, but will create the conditions for greater prosperity in America and throughout the deeply interconnected world economy. Shiller has been a research associate of the National Bureau of Economic Research (NBER) since. His idea of baskets is, at best, untested. There are those who think the oil price fluctuation was caused by speculation in futures. Yes, by that time, people. I liked a lot of the economic reforms that Shiller recommends and I really liked that he has an approach that is so socially aware. PhD in Economics (Paris-1), researcher and independent consultant, Dominique Perrut is the author of papers, articles and works on financial intermediaries, regulation and the European economy (L'Europe financière et monétaire, Nathan; Le système monétaire et financier français, Seuil, coll. Expect a prolonged period of slow economic growth. (p.43), This book did a good job of explaining what happened to cause the subprime meltdown. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. After Bear Stearns but before Lehman, AIG, the election of Obama, and the Hank Paulson/Bush administration bailout of Wall Street. For one, lenders were selling these as mortgage-backed securities. In this 2010 US Senate testimony, Steven Eisman predicted what could become the next big financial bubble to burst: student loans. In fact, that's the solution to the subprime crisis. While I agree with a lot of his viewpoints in Irrational Exuberance, I thought his viewpoints in The Subprime Solution did not sufficiently address the real culprit of the mortgage crisis. Your highlights will appear here. The current lending practices encourage people to stay in debt and live above their means. At times a bit difficult for those without a background in economics, but Shiller generally does a good job of explaining his position in a way that a layperson can understand. Both bubbles involved excessive lending and resulted in severe losses for capital providers. Bless the mess. I agree that flawed group intelligence was certainly one of the reasons of the subprime crisis, but it was not the only one. I'd read this while the Financial Services industry was melting and people were getting smoked in-front of me in 2007; perhaps (and rather unfortunately) Professor Shiller didn't have as much clout and power as Paulson and Co., otherwise many of his solutions/prescriptions could have been adopted by the Fed, but a bail-out in the short-run and quantitative easing in the long run both seemed like much "easier" solutions to adopt. This summary offers a concise overview of the entire book in less than 30 minutes reading time. Still, I learned alot about the subprime crisis, so it was worthwhile. Bold – You’ll find arguments that may break with predominant views. that subprime mortgages were mainly to blame less and less plausible. The most interesting tidbit I have come across in this work is how Greenspan's lack of oversight with regard to the whole crisis could be partially due to a philosophical bias--his penchant for Ayn Rand's objectivism. His analysis is persuasive, for example, discussing how the easy credit and low lending standards created the bubble. Shiller, a Yale economist who, with Karl Case, developed the Case-Shiller Index of Home Prices, predicted the bursting of the tech-stock bubble while the rest of the world gushed over the permanence of the "New Economy". Overview. Our rating helps you sort the titles on your reading list from adequate (5) to brilliant (10). More people need to read this book to at least absorb his lexicon. Kind of pales in comparison to reality. for missing the signs that the housing bubble was going to burst. The subprime mortgage crisis has already wreaked havoc on the lives of millions of people and now it threatens to derail the U.S. economy and economies around the world. Overview – You’ll get a broad treatment of the subject matter, mentioning all its major aspects. Just click the "Edit page" button at the bottom of the page or learn more in the Synopsis submission guide. Robert James "Bob" Shiller (born Detroit, Michigan, March 29, 1946) is an American economist, academic, and best-selling author. … Do you think exorbitant wages of financial executives are not the reason for social inequality and why millions of people lost their jobs and homes? In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. We’d love your help. The Financial Crisis and the Free Market Cure. I'm a fan of Robert Shiller, but this isn't one of his strongest books. Its ripple effects constricted credit globally and led to the failure of several major financial institutions. His idea of baskets is, at best, untested. Here are Shiller's exact words on Greenspan: "Perhaps his lack of attention to bubbles reflected, at least in part, an overly strong ideological alignment with Ayn Rand. Discover the best Subprime Lending books and audiobooks. This is an excellent book for anyone who wants to understand what went wrong, and more importantly, how to fix it. This ebook consists of a summary of the ideas, viewpoints and facts presented by Robert J. Shiller in his book “The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do About It”. Inspiring – You’ll want to put into practice what you’ve read immediately. There's a bit of "I told you so" directed at Alan Greenspan et al. Welcome back. As a country, we need to go back to the days when there were no zero down mortgages, and people had to pay at least 10% down. Engaging – You’ll read or watch this all the way through the end. The author is economist Robert J. Shiller, of the Case-Shiller Home Price index, and he's one of the few people that was willing to call housing prices a bubble, before it popped. He currently serves as the Arthur M. Okun Professor of Economics at Yale University and is a Fellow at the Yale International Center for Finance, Yale School of Management. Refresh and try again. This book did a good job of explaining what happened to cause the subprime meltdown. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. What we say here about books applies to all formats we cover. Do you think it should get even bigger with more people involved? When home prices fell in 2006, it triggered defaults. As a matter of fact, the lesson has not been learned and markets are an illusion created by few manipulators. For a suggestion of what may be coming in the wake of the subprime crisis, look at the “lost decade” in Mexico after the 1980s oil bubble, and the 1990s stagnation in Japan after its 1980s equity and real-estate bubbles. Eloquent – You’ll enjoy a masterfully written or presented text. Both his diagnosis and his prescription will be controversial, no doubt, but getAbstract thinks his book is a necessary text for anyone who wants to understand what’s happened, and how to survive it and learn from it. However, the damage this crisis has done to the social fabric is even more severe than the damage to the financial system. He is the winner of the getAbstract International Book Award 2003. I think the long-term solutions don't seem viable. The United States’ decade-long real-estate bubble brought about the subprime mortgage crisis that began in 2006. In this trenchant book, best-selling economist Robert Shiller reveals the origins of this crisis and puts forward bold measures to solve it. The Fed has been doing it since 1914 and the Bank of England has been doing it for 100s of years. Let us know what’s wrong with this preview of, Published Robert James "Bob" Shiller (born Detroit, Michigan, March 29, 1946) is an American economist, academic, and best-selling author. 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