Mind Over Market

Class Lecture Carey School of Business Johns Hopkins University Washington, D.C. Campus April 17, 2012 By Robert Stowe England For most Americans, a thick fog still shrouds the origins of the financial crisis. This is true despite the fact three years have past since the crisis burst on the scene in September 08 with the bankruptcy of Lehman Brothers. Finding the answer to what went wrong is what compelled me to write Black Box Casino. In the end, it was a detective story where even a list of important actors could run into the hundreds. At the center of origins of the crisis is a single industry – the mortgage industry. As senior writer for Mortgage Banking magazine since 1988, I have reported on the vast changes sweeping through the industry for more than two decades. We’ve come a long way. In the early 1990s, the mortgage industry was disciplined by the free market. It was flexible and innovative. New loan products would appear and market players would experime...

Investors Business Daily in an op-ed writes June 30: Subprime Scandal: Democrats thought they'd dammed up the truth about government's role in the financial crisis. But the levies are breaking, thanks to a spate of rogue new books on the subject. The latest, "Reckless Endangerment," shreds the narrative carefully constructed by Democrats and the liberal media that Fannie Mae and Freddie Mac were only bit players in the crisis and followed Wall Street into subprime lending. It details how the federally chartered mortgage giants in fact led the way in relaxing underwriting standards for the entire industry — thanks to relentless pressure from Democrats, who used them as off-budget piggy banks to fund their social crusade to boost minority homeownership (and shore up their voting base). Read more .