Later this week my real estate law class turns to the topic of real estate finance, from which it is a brief stroll–maybe even a short stumble–to sub-prime mortgages, collapse of the housing market, the worldwide recession, Wall Street malfeasance, borrower irresponsibility, mortgage broker greed, and all the other stuff that dominated the news a few years ago, but now is fading into the mists. (Charles Ferguson’s remarks during his Academy Award acceptance speech for Inside Job show he hasn’t forgotten.) A blessing of living in the information age is–duh–that there is lots of information. A lot of crap, but a lot of gold–books like The Big Short by Michael Lewis, House of Cards by William D. Cohan, Too Big to Fail by Andrew Ross Sorkin, articles (all from Vanity Fair) like Michael Lewis’s Wall Street on the Tundra, The Man Who Crashed the World, and Beware of Greeks Bearing Bonds (the subject doesn’t matter–Lewis is always worth reading), and podcasts. Two, from This American Life, present clear and interesting overviews of sub-prime mortgage generation and securitization and their relationship to the capital markets: The Giant Pool of Money, originally aired 9 May 09, and Return to the Giant Pool of Money, originally aired 25 Sep 09.
And videos. A student recommended this terrific 11-minute animated explanation of the origins of the credit crisis. As the accompanying notes acknowledge it leaves out a few things, but that’s a quibble. It’s remarkably clear and concise.