I've done quite a bit of reading on this, and the economic structure that allowed the meltdown to occur is as you stated. But the trigger event is most definitely the agreement between banks and the Clinton administration in response to the Obama class action lawsuit.
Without that agreement, sub-prime loans never emerge, no risk mitigati…
I've done quite a bit of reading on this, and the economic structure that allowed the meltdown to occur is as you stated. But the trigger event is most definitely the agreement between banks and the Clinton administration in response to the Obama class action lawsuit.
Without that agreement, sub-prime loans never emerge, no risk mitigation is needed and mortgage derivatives are never developed, loan defaults don't occur, bank capital does not get hammered, and the credit market doesn't freeze.
I've done quite a bit of reading on this, and the economic structure that allowed the meltdown to occur is as you stated. But the trigger event is most definitely the agreement between banks and the Clinton administration in response to the Obama class action lawsuit.
Without that agreement, sub-prime loans never emerge, no risk mitigation is needed and mortgage derivatives are never developed, loan defaults don't occur, bank capital does not get hammered, and the credit market doesn't freeze.