The subprime panic / Gary B. Gorton.
Material type:
TextSeries: Working paper series (National Bureau of Economic Research) ; no. 14398.Publication details: Cambridge, Mass. : National Bureau of Economic Research, 2008Description: 38 p. : ill. ; 22 cmSubject(s): Financial crises -- United States -- 21st century | Subprime mortgage loansLOC classification: HB1 | .N38 no. 14398Online resources: Click here to access online Summary: Understanding the ongoing credit crisis or panic requires understanding the designs of a number of interlinked securities, special purpose vehicles, and derivatives, all related to subprime mortgages. I describe the relevant securities, derivatives, and vehicles to show: (1) how the chain of interlinked securities was sensitive to house prices; (2) how asymmetric information was created via complexity; (3) how the risk was spread in an opaque way; and (4) how trade in the ABX indices (linked to subprime bonds) allowed information to be aggregated and revealed. These details are at the heart of the origin of the Panic of 2007. The events of the panic are described.
| Item type | Current library | Collection | Call number | Copy number | Status | Date due | Barcode |
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University of Macedonia Library Βιβλιοστάσιο Β (Stack Room B) | Research Papers | HB1.N38 no. 14398 (Browse shelf (Opens below)) | 1 | Available | 0013115737 |
Includes bibliographical references (p. 34-38).
Understanding the ongoing credit crisis or panic requires understanding the designs of a number of interlinked securities, special purpose vehicles, and derivatives, all related to subprime mortgages. I describe the relevant securities, derivatives, and vehicles to show: (1) how the chain of interlinked securities was sensitive to house prices; (2) how asymmetric information was created via complexity; (3) how the risk was spread in an opaque way; and (4) how trade in the ABX indices (linked to subprime bonds) allowed information to be aggregated and revealed. These details are at the heart of the origin of the Panic of 2007. The events of the panic are described.
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