ISBN-10:
0300212704
ISBN-13:
9780300212709
Pub. Date:
05/26/2015
Publisher:
Yale University Press
Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

Other People's Houses: How Decades of Bailouts, Captive Regulators, and Toxic Bankers Made Home Mortgages a Thrilling Business

by Jennifer S. Taub J.D.Jennifer S. Taub J.D.
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Overview

The clearest explanation yet of how the financial crisis of 2008 developed and why it could happen again

In the wake of the financial meltdown in 2008, many claimed that it had been inevitable, that no one saw it coming, and that subprime borrowers were to blame. This accessible, thoroughly researched book is Jennifer Taub’s response to such unfounded claims. Drawing on wide-ranging experience as a corporate lawyer, investment firm counsel, and scholar of business law and financial market regulation, Taub chronicles how government officials helped bankers inflate the toxic-mortgage-backed housing bubble, then after the bubble burst ignored the plight of millions of homeowners suddenly facing foreclosure.
 
Focusing new light on the similarities between the savings and loan debacle of the 1980s and the financial crisis in 2008, Taub reveals that in both cases the same reckless banks, operating under different names, received government bailouts, while the same lax regulators overlooked fraud and abuse. Furthermore, in 2013 the situation is essentially unchanged. The author asserts that the 2008 crisis was not just similar to the S&L scandal, it was a severe relapse of the same underlying disease. And despite modest regulatory reforms, the disease remains uncured: top banks remain too big to manage, too big to regulate, and too big to fail.

Product Details

ISBN-13: 9780300212709
Publisher: Yale University Press
Publication date: 05/26/2015
Edition description: New Edition
Pages: 424
Sales rank: 803,843
Product dimensions: 6.10(w) x 9.10(h) x 1.20(d)

About the Author

Jennifer Taub is a professor at Vermont Law School and formerly an associate general counsel at Fidelity Investments. She lives in Northampton, MA.

Table of Contents

Introduction: Lost Ground 1

Part I Highfliers

Chapter 1 The Nobelmans 9

Chapter 2 The Condo King and His Empire 17

Chapter 3 The Run on American Savings and Loan 34

Chapter 4 The Saturday Night Massacre 47

Chapter 5 Deregulation Inauguration 59

Chapter 6 The Red Baron of Finance 78

Chapter 7 The Bailout 97

Chapter 8 Friends of the Court 108

Part II Repeat Performance

Chapter 9 Friend of the Family 123

Chapter 10 The Factory Line 140

Chapter 11 The Bubble 163

Chapter 12 First to Fall 188

Chapter 13 Surf and Turf 209

Chapter 14 Legal Enablers of the Toxic Chain 222

Chapter 15 The Great Betrayal 247

Part III Myth Confronts Reality

Chapter 16 Dispelling Myths about the Crisis 269

Epilogue: Cast Again 284

Notes 303

Acknowledgments 385

Index 391

Interviews


Do the conditions that caused the financial crisis persist? Could this happen again?

Unfortunately, yes. In 2009 Federal Reserve chairman Ben Bernanke defended the multi-trillion-dollar bailouts, explaining that "it wasn't to help the big firms that we intervened. . . . When the elephant falls down, all the grass gets crushed as well." Today, the elephants are larger than ever, and the grass is still crushed. The top banks are bigger, and they still borrow excessively in the short-term and overnight markets, leaving them vulnerable to runs. But let's be clear. For most Americans, it's not a question of when the next crisis will hit, but when this one will end.
 
Why another book about the financial crisis? What's new here?

 I wrote Other People's Houses because I wanted to tell the story of the crisis from the perspective of homeowners. Many books about the crisis speak in broad concepts, or they dramatize the crisis exclusively from the vantage point of bank executives and high-level government officials. Homeowners who are included can appear randomly selected, like stock characters. Other People's Houses takes a fresh approach. The central narrative thread is the Nobelman v. American Savings Bank decision, a Supreme Court case that still prevents families from saving their homes through bankruptcy. My book uncovers the back stories of the associated homeowners, bankers, and regulators and traces them forward from the savings and loan debacle, through the toxic-mortgage-backed financial crisis, to the JPMorgan Chase $6 billion London Whale trading losses.

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