The United States: An Economic Balance Sheet Analysis

Kees De Koning ()

MPRA Paper from University Library of Munich, Germany

Abstract: The U.S financial crisis started in October 2005. The level of new home starts would have replaced the total owner occupied housing stock in 37 years. Much faster than desirable. Mortgage interest rates also went up in same month. In 2006 mortgage lending went on unabated, but housing values did not keep pace. Securitisation led to the well known liquidity crisis in 2008.The impression was given that investors could get out of mortgage risks on a daily basis. Banking crisis, economic crisis and government deficit funding crisis followed. The paper sets out why the crises were foreseeable, avoidable but are also solvable in the short term.

Keywords: Balance Sheet of Households and Nonprofit Organizations; Individual households assets and liabilities and net worth; U.S mortgage markets; mortgage products; mortgage debts; consumer credits; types of households; banking roles; Fannie Mae and Freddy Mac; unemployment; country profit; banking supervisors; economic easing; econsystem (search for similar items in EconPapers)
JEL-codes: E00 E21 E24 E32 E44 G14 G2 O51 (search for similar items in EconPapers)
Date: 2012-11-28
New Economics Papers: this item is included in nep-ure
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