quinta-feira, 11 de fevereiro de 2010

Stiglitz - novo livro: Free Fall

Acaba de sair mais um livro de Stiglitz: Freefall: America, Free Markets, and the Sinking of the World Economy.

O primeiro capítulo intitula-se The Making of a Crisis.

Começa assim:

The only surprise about the economic crisis of 2008 was that ir came as a surprise to so many. For a few observers, it was a textbook case that was not only predictable but also predicted. A desregulated market awash in liquidity and low interest rates, a global real estate bubble, and skyrocketing subprime lending were a toxic combination. Add in the U. S. fiscal and trade deficit and the corresponding accumulation in China of huge reserves of dollars - an unbalanced global economy - and it was clear that things were horribly awry.
E continua assim umas linhas depois:

The basic outlines of the story are well known and often told. The United States had a housing bubble. When that bubble broke and housing prices fell from their stratospheric levels, more and more homeowners found themselves "underwater". They owed more on their mortgages than what their homes were valued. As they lost their homes, many also lost their life savings and their dreams for a future - a college education for their children, a retirement in comfort. Americans had, in a sense, been living in a dream.


Low interest rates and lax regulation fed the housing bubble. As housing prices soared, homeowners could take money out of their houses.

The economy was out of Kilter: two-thirds to three-quarters of the economy (the GDP) was housing related: constructing new houses or buying contents to fill them, or borrowing against old houses to finance consumption. It was unsustainable - and it wasn´t sustained. The breaking of the bubble at first affected the worst mortgages (the subprime mortgages, lent to low-income individuals), but soon affected all residencial real estate.
When the bubble popped, the effects were amplified because banks had created complex products resting on top of the mortgages. Worse still, they had engaged in multibillion-dollar bets with each other and with others around the world. This complexity, combined woith the rapidity with which the situation was deteriorating, and the banks' high leverage (they, like households, had financed their investments by heavy borrowing), meant that the banks didn't know wether they owed to their depositors and bondholders exceeded the value of their asset. The trust and confidence that underlie the banking system evaporated.

Para acabar a citação:

What would replace the unbridled consumption of Americans that had sustained the economy in the years before the bubble broke? How were America and Europa goin to manage their restructuring, for instance, the transition toward a service-sector economy that had been difficult enough during the boom?

Afinal, agora é que acaba:

How did it all happen? This is not the way market economies are supposed to work. Something went wrong - badly wrong.

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