Robert L. Bartley Editor Emeritus, The Wall Street Journal As this
collection of essays is published, markets, regulators and society
generally are sorting through the wreckage of the collapse in tech
stocks at the turn of the millennium. All the more reason for an
exhaustive look at our last “bubble,” if that is what we choose to
call them. We haven’t had time to digest the lesson of the tech
stocks and the recession that started in March 2001. After a decade,
though, we’re ready to understand the savings and loan “bubble”
that popped in 1989, preceding the recession that started in July
1990. For more than a half-century, we can now see clearly enough, the
savings and loans were an accident waiting to happen. The best
insurance for financial institutions is diversification, but the
savings and loans were concentrated solely in residential financing.
What’s more, they were in the business of borrowing short and
lending long, accepting deposits that could be withdrawn quickly and
making 20-year loans. They were further protected by Regulation Q,
allowing them to pay a bit more for savings deposits than commercial
banks were allowed to. In normal times, they could ride the yield
curve, booking profits because long-term interest rates are generally
higher than short-term ones. This world was recorded in Jimmy
Stewart’s 1946 film, It’s a Wonderful Life.
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Produktdetaljer
ISBN
9781402078989
Publisert
2020
Utgave
1. utgave
Utgiver
Vendor
Springer
Språk
Product language
Engelsk
Format
Product format
Digital bok