2008 Financial Crisis - Academics

  • 2010 1021 FCIC Viral Acharya, New York University BN06092021
  • 2010 0908 FCIC William (Bill) Black, University of Missouri 2parts
  • Shiller
  • Stieglitz
  • Michael Greenberger
    • Professor, University of Maryland School of Law; former Director, Division of Trading and Markets, Commodity Futures Trading Commission (1997-1999)
    • FCIC - Hearing - testifying on June 30, 2010 in front of the Financial Crisis Inquiry Commission 
    • 2008 0917 - NPR - Fresh Air - Was 'Adult Supervision' Needed On Wall Street? - [link]
      • Michael Greenberger, a former director at the U.S. Commodity Futures Trading Commission, tells Terry Gross that the government's decision to bail out AIG is a sign that the economy is "teetering on the brink."
      • "The Fed and the Treasury are very, very worried about the stability of the economy," Greenberger says.
        • "They're worried about what this means to Main Street, about what it means to you and me. ... In the absence of this rather dramatic move I think they believe that we would enter something much deeper, possibly, than a recession."
    • 2010 0225 - FCIC - Memorandum for the Record - Michael Greenberger - 6p
      • (p) - Commissioner Born:  We know that CDS brought down AIG. We know that OTC derivatives and lack of transparency played a major role in the collapse of investment banks.
      • (p5) - Commissioner Born: The reason CDOs were such great buys for European banks was – if they got AIG to write CDS on CDOs, there was no capital requirement [for the CDO asset being held].
        • This was used to evade capital requirements.
      • (p) - Commissioner Born:  Two issues –
        • (1) What do we investigate; and
        • (2) What do we put in the hearing (will be a small subset – focus on most visible and explainable aspects)
      • (Greenberger)
        • Interview AIG witnesses – did they know they were selling naked CDS?
        • The banks (e.g., Citigroup, JPMorgan Chase) are required by federal regulators to hedge all swaps in order to be a derivatives dealer.
          • Banks all went to AIG for the hedge. 
          • Query whether the real scandal is that banks knew AIG wasn’t hedging and weren’t reserving appropriately.
        • We should talk to people at the banks buying the protection from AIG.
          • What did they know and when did they know it?
          • [Bonk:  2010 0223- A New Wrinkle In The Goldman-AIG CDO Mess, By Daniel Indiviglio
            [link]

            • If Goldman and other banks knew these securities were garbage, should they explain why they asked AIG to insure them? Not necessarily.
    • 2010 0412 - Interview: Michael Greenberger, University of Maryland School of Law, ex-CFTC, on derivatives - 7p
      • [Kim: Synthetic CDOs. We should get data on the extent of exposures and the extent of losses in the system. Who if anyone has tried to come up with that data?] Lehman Brothers… the examiner found that out. Lewis’ book: synthetic created “fantasy” CDOs. Then you have CDS on the fantasy CDOs.
        • Then you have naked CDS… Dinallo did a study on this—testified in February 2009. Before AIG there were the monolines sucked into this. He got called in February 2008 by FRBNY about MBIA. Dinallo didn’t know what a CDS was. He says, this is insurance. In September, after AIG fails, he and Paterson on 9/22 say, from here on, we’re going to treat real CDS as insurance. But naked CDS we can’t do because CFMA banned states from regulating bucket shops etc. Without the anti-gaming preemption, you can’t have any unregulated instrument. Other insurance commissioners said no. The insurance of an interest for which there is no risk is not insurance. That was out for six weeks, and Dinallo/Paterson pulled it back. Dinallo said for every CDS that insures real risk there are three naked CDS in the subprime securitization market.
  • 2009 - AP - Enablers of Exuberance: Legal Acts and Omissions that Facilitated the Global Financial Crisis, by Jennifer S. Taub - 69p
  • 2015 - AP - The Effects of the Great Recession and the Implications on the Insurance Market, by Jamie Ruggirello - 87p