{"id":"asset_99751f2771d1","type":"text/plain","category":"text","name":"05-global-financial-crisis-2008.txt","size_bytes":3872,"title":"05 global financial crisis 2008","description":"An analysis of the 2007–2009 financial crisis examining the policy response and its distributional consequences. It details the mechanisms of the crisis, the government's bank-focused rescue strategy, and argues about whether prioritizing financial system stability over household debt relief was the right choice.","extracted_text":"# Banks Were Recapitalised, Households Were Foreclosed: 2007–2009\n\nThe S&P 500 fell 57 per cent from October 2007 to March 2009. Lehman Brothers\nfailed, AIG was nationalised in all but name, and for a fortnight in September\n2008 the commercial paper market — the plumbing through which ordinary companies\nmake payroll — simply stopped. Roughly $19 trillion of US household wealth\nevaporated. Nearly 9 million jobs went. Some 10 million American families\neventually lost their homes.\n\nThe causes have been catalogued exhaustively: mortgages underwritten without\nregard to repayment because the originator sold them within weeks; securitisation\nthat pooled those mortgages and, through the alchemy of tranching, produced\nAAA-rated paper from subprime collateral; rating agencies paid by issuers to\nassign those ratings; credit default swaps written in size by an insurer with no\ncapital set against them; and banks levered 30-to-1 funding long-dated illiquid\nassets in overnight repo markets. Every lin","attributes":{},"usable_for":["policy debate on crisis response priorities","figures on wealth loss and job displacement","comparison of bank versus household recovery timelines"],"provenance":"original-work","provenance_note":"An original analytical essay by its author.","kind":"analytical essay","reliable_for":"The author's argument about financial crisis policy and the evidence it cites.","describe_v":6,"price_sats":{"card":0,"full":200},"content_available":true,"available":true,"retained_offered":false,"embed_offered":false,"licences":{"single-task":{"sats":200,"grants":"use for one task, then let go"},"retained":null,"embed":null}}