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Bursting of the Twin Bubbles

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Abstract

The previous chapter examined the interplay of forces that produced the twin bubbles in house prices and the volume of credit. This chapter looks at the events that transpired as these bubbles deflated rapidly in 2007 and 2008 as house prices fell and the process of deleveraging commenced. The following chapter examines the ways in which the popping of the twin bubbles spilled over to create the lengthiest and most severe U.S. economic contraction since the 1930s.

Keywords

Financial Crisis House Price Hedge Fund Credit Default Swap Liquidity Risk 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Notes

  1. 4.
    For a riveting account of the developments of mid-September 2008, see James B. Stewart, “Eight Days,” The New Yorker, September 21, 2009. Other readable accounts can be found in David Wessel, In Fed We Trust (New York: Crown Publishing Group, 2009)Google Scholar
  2. and Andrew Sorkin, Too Big to Fail (New York: Viking, 2009).Google Scholar

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© Lloyd B. Thomas 2013

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