In 2009, in the aftermath of the financial crisis, the debt of the world’s advanced economies shot up the equivalent of a bit more than 10 percent of their GDP; in 2020/21, as a result of efforts to stimulate the economy in the wake of the pandemic, the debt of those same countries increased by the equivalent of almost 19 percent of their GDP. The average national debt for the entire group is now well above the size of their economies.

In many cases, of course, the figures are misleading. This is the case of the U.S., where, if you include the government’s unfunded liabilities, the debt does not amount, as we are told, to some US$28 trillion, but actually to US$100 trillion.

If the economy was growing at a faster rate than the debt in the developed world, that fact would not detract from the enormousness of the problem, but at least we could say that temporarily things were getting slightly less catastrophic. The truth, however, is that it keeps getting worse—and worse. In the world’s developed economies, the debt has multiplied by 4.5 in the last twenty years, while GDP has multiplied by only 1.9.

There was a time when proponents of indebtedness argued that deficits and debt did not matter as long as the economy kept growing. In the end, debt catches up with you one way or another, of course, but that argument has been reduced to utter garbage in the light of the reality of the last twenty years. My guess is that it will look even more ridiculous in years to come since a debt of this magnitude is itself a powerful contributor to slow (or no) growth.

How will this end? There is only one way it can end. If we rule out, (as we should, given the political implications) the kinds of fiscal cuts that taming the debt would entail, we are left with two choices—massive tax hikes and inflation. The size of the debt is such that even in the short run massive tax hikes would not begin to address the problem—not to speak of the real problem, which is that such levels of taxation would cripple any chance of future growth and therefore of addressing the debt. So, we are left with the oldest trick in the book—huge inflation. For centuries governments have resorted to inflation in order to whittle away their debts. Given the lack of realistic alternatives, I see no other way in which this horror story will eventually end, regardless of the fact that, given people’s focus on deleveraging in recent years, consumer price inflation has stayed relatively low. It just a question of time.

What is happening in financial terms is at least as momentous, and perhaps more, than the end of the gold standard in the UK and (partially) the US in the 1930s, the end of the Bretton Woods fixed-exchanged rates at the end of the 1960s and Nixon’s definitive abandonment of the gold standard in the 1970s.

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Whalen provides a good primer for understanding a situation that one analyst has described as a potential “Black Swan event,” a catastrophic occurrence that is generally believed to be so unlikely that when it shows up, nobody is prepared to cope with it because it was too unpredictable.

For today’s liquidity crisis, a Black Swan event may be touched off by the sudden flooding of the nation’s bond markets with newly issued Treasury bills and bonds to replenish the U.S. Treasury’s operating funds after an extended period of “extraordinary measures” to keep the U.S. national debt under its statutory limit and to finance new government spending authorized by the Bipartisan Budget Act of 2019.

Before the last two months, hardly anyone was considering whether the U.S. government’s operational financing requirements to sustain its fiscal policies could precipitate an emergency central bank intervention to keep markets functioning. In normal circumstances, the two kinds of policies are set independently of each other, such that monetary policy is irrelevant to fiscal policy and vice versa.

Following the sudden development of the new liquidity crisis, however, Whalen asked several market analysts the question, “Is fiscal policy ‘irrelevant’ to monetary policy?” He presents the responses he received, which range from “Yes. Yes. And yes it is” through “It is certainly not irrelevant.” Perhaps the most interesting response was from Robert Bruca, the chief economist at FAO Economics, who said:

No, fiscal policy is never irrelevant. But no one is trying to make them work together either. So it is easy to see how some might think fiscal policy is irrelevant. In the 1980s Volcker held up a rate cut telling Congress it had to pass a bill to contain the deficit before he would cut rates.

Janet Yellen and her Fed went ahead with a program of rate hikes in part because it saw the Trump tax cuts and fiscal policy as too expansive at a time the economy had ‘few idle resources’. That did not turn out well as the Fed over tightened and is currently in the process of rescinding its excessive rate hikes.

The main ‘problems’ with fiscal policy is that it is too tempting. Keynes’ Idea was to use it as a counter-cyclical tool- on then off. But once governments start using fiscal policy for economic expansion they just can’t control themselves – fiscal policy is the opiate of the elected.

In the 1930s, John Maynard Keynes argued that when the economy was in recession, the government could stimulate aggregate demand by running a budget deficit, thereby increasing government spending as even tax revenues fall. As the economy resumed growing, the government would then cut its spending to below the recovering tax revenues, with the aim of balancing the budget over the long term.

Keynesian policies were dropped with the implementation of the Great Society programs of the 1960s, and ever since then the government has continually run budget deficits with few exceptions. The Bipartisan Budget Act of 2019 and the spending it enabled is only making the situation worse.

Isn’t it time the politicians and bureaucrats who run the government reined in their opiate addiction and went into rehab?

The post Can the Fed Handle the Next Financial Catastrophe Arising from Politicians’ Addiction to Spending? appeared first on The Beacon.

Southern Utah University economist David Tufte explains what started happening in the last week in plain English:

The Fed has been heavily buying repurchase agreements (repos). Translated, this means they’re trying to reduce short term interest rates. Quite aggressively too.

Nathan Tankus explains that this is a response to the Basel III accords for avoiding and managing financial crises. These are not official yet, but the U.S. is following them. This is the first time they’ve had to do this particular thing, and it’s been clumsy, but not a problem.

Basically, the really large banks now have to have enough liquidity to get themselves through 30 days of bad news. But that means they have to hoard liquidity. But liquidity is costly to hold; in the past their (internal) liquidity would go up and down with interest rates, as they sold and bought Treasury bills. Those big banks have been short on liquidity so they’ve been hoarding it. This drove up rates. A central bank is supposed to respond to this by buying securities from the banks. That’s the repos. The Fed was a bit slow on the uptake that this is the way the world works now.

There’s more to it than that, however. Because the flood of new government-issued debt securities that the U.S. Treasury will be issuing in the months ahead is so large, the Fed will feel compelled to “resume the organic growth of the balance sheet sooner than we thought,” in the words of Fed Chair Jerome Powell this past week. Which is to say that the Federal Reserve is getting set to restart its quantitative easing policies within the next few months.

Quantitative easing (QE) is an extraordinary monetary policy that the Federal Reserve implemented during the Great Recession to stimulate the economy after it had cut interest rates to zero percent by purchasing government-issued debt securities, such as U.S. Treasury bills and bonds, to get the effect of additional cuts to interest rates. As a result of its QE policies, the Federal Reserve became one of the largest single creditors to the U.S. government at a time when the size of the national debt was surging.

How big of a creditor? At the peak of its second period of quantitative easing at the end of July 2011, the U.S. Federal Reserve had lent the U.S. government over 30 percent of all the money it borrowed from the public since it first launched its extraordinary monetary policy at the end of September 2008.

Since that time, the Fed’s share of the U.S. government’s total public debt outstanding has fallen off as the U.S. central bank has sought to “normalize” the holdings on its balance sheet, but the new liquidity crisis is forcing it to reverse that policy and to begin a new era of quantitative easing. Bloomberg reports on the comments of former Fed official Simon Potter:

A former top Federal Reserve official, who oversaw the U.S. central bank’s trading desk, has warned that the type of actions taken so far to quell this week’s turmoil in money markets may not be enough to keep conditions calm and fresh debt purchases may be needed.

Simon Potter, the former New York Fed executive, made the remarks during a conference call that Bank of America hosted for its clients, according to three people who listened.

Potter cautioned that policy makers may have to expand the central bank’s balance sheet through outright purchases of U.S. Treasury securities, to ensure stable liquidity conditions at the end of the quarter as well as at year-end, said the people, who declined to be named because the call was private.

The recommendation follows a week of intense upheaval in money markets during which short-term interest rates spiked and pulled the Fed’s policy benchmark rate outside its target range. It also goes beyond what the New York Fed has promised so far to keep the situation in check going forward.

There has already been an increase in the amount of U.S. Treasuries on the Federal Reserve’s balance sheet in recent weeks as the Fed has reversed its normalization policy. One effect of the Fed’s new interventions will be to lower the cost of borrowing for the U.S. government by lowering interest rates.

But there are severe costs to go along with that apparent benefit. Because all interest rates would be lower as a result of the Fed’s new QE intervention, a lot of Americans who rely on interest income from their savings, such as retirees, can expect to have less income to live on. In response, a lot of these folks will chase riskier investments for higher returns, which will put them at risk of even greater losses. The short history of QE is littered by such savers who were crushed by the experience.

The new financial crisis could have been avoided, if only a bipartisan majority of politicians in Washington, D.C., could have restrained the growth of their spending to sustainable levels. But they wouldn’t, so here we are.

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The movie stays well within its R rating, and screenwriter and director Lorene Scafaria keeps the story focused on the women at its center. Ramona (Lopez) is a veteran stripper who has figured out how to turn her pole-dancing performances into cash. The story, however, is told from the point of view of Dorothy, aka Destiny (Constance Wu, Crazy Rich Asians), a struggling single mother who is desperate to pay her bills and support her elderly grandmother.

Dorothy reluctantly takes a job in New York City strip clubs, but can’t seem to generate enough tips despite being a triple threat: ambitious, beautiful, and Asian. Ramona takes Dorothy under her wing, teaching her the tools of the trade and introducing her to her clients. Most importantly, Ramona teaches Dorothy how to distinguish between the clients that are unlikely to bring in money, those who are steady but not particularly wealthy, and the high-income earners willing to spend cash freely for a cheap sexual thrill. As you might expect, the high-rollers are the ones that are the cultural bottom feeders—entitled by their wealth and power, careless with their personal money, and loyal to themselves rather than their families. Everything crashes when the financial crisis upends Wall Street and decimates the bank accounts of the cash-spending CEOs, private bankers, and hedge-fund managers.

When Dorothy ends up pregnant, she tries to leave the business but is forced back to the strip club two years later in order to support her toddler and grandmother. Ramona and Dorothy concoct a scheme to swindle a new wave of even less ethical businessmen by stealing money through credit card fraud. When Ramona cuts off ties with their home club, their enterprise ends up taking on even riskier clients to keep the cash flowing into their bank accounts. While Destiny tries to keep the business in line the functional CFO of their business, she thinks Ramona might be sending it off the rails.

Hustlers is a layered and nuanced film. While some in the audience might be tempted to dismiss the movie as another installment of “woke” Hollywood, the story and the movie are much more than this. Unquestionably, the movie is telling the story from the point of view of the women. But the characters are drawn with the multidimensional characteristics—fear, ambition, success, courage, guilt, shame, excess, cunning, and fallibility. These characteristics flow into the relationships among themselves as well as the men in their lives. Even the boorish behavior of the men they target is placed in a context of the lives and ambitions the women at the center of the story.

Screenwriter Scarafaria does not romanticize the strip-club industry despite staying well within its R rating. Rather the clubs, and the women who work in them, are shown as everyday people who are trying to make a living at one of the few jobs available to them. The exploitative nature of the clubs is not drawn so harshly as to demonize the men who run them. Not surprisingly, the ethics of the business, and the rationalizations used to perpetuate it, run parallel to the ascent and fall of the principal characters.

Hustlers is a drama loosely based on the article “The Hustlers of Scores” by journalist Jessica Pressler, an editor with New York magazine. The core of the story is a sophisticated character study that will leave many in the audience pondering the meaning of friendship, loyalty, betrayal, and ethics. Some might be less than satisfied with the ending, but this effect is probably intentional on the part of writer-director Scarafaria.

Scarafaria is walking a grey line with the plot and her characters. Well-executed, the story is sufficiently meaty that the actors have the juice they need to turn in excellent performances. Combined with the top-flight performances of Lopez, Wu, and several among its supporting cast—including fellow strip-club workers played by veteran actress Mercedes Ruehl, Keke Palmer, Julia Stiles, Lili Reinhart, rapper Cardi B —Hustlers may well see nominations in the categories of Best Director, Best Screenplay, Best Actress, and Best Supporting Actress, when major awards season comes around in 2020. These nominations will be earned, not a by-product of a “woke” Hollywood.

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That’s a massive amount of money for the federal government to finance through the sale of U.S. Treasuries in a relatively short period of time, a volume that appears set to cause problems in global credit markets. ZeroHedge explains how flooding those markets with newly issued U.S. Treasuries to fund the new spending enabled by the 2019 bipartisan budget deal may come to wreak financial havoc in them:

When it comes to investing in safe assets such as US Treasuries, the decision process is relatively simple: one buys coupon securities (with a maturity over 1 year), on specific expectations of inflation (or deflation) and receiving current income in the form of a cash coupon (assuming there is one). When it comes to T-Bills the decision is simpler: it’s all about liquidity preference – does one keep cash equivalents in the form of US Dollars, whether paper or electronic, or does one purchase Bills, with a maturity from 4- to 52-weeks. If investors are mostly happy to exchange money for Bills, it is generally said that liquidity in the financial system is ample; if however investors are unwilling to part with their “cash” in order to fund the US Treasury (as a reminder, in a time of chronic budget deficits, Uncle Sam has to issue debt to fund its operations), then there is a liquidity shortage.

We bring this up because last week we warned that as the Treasury scrambles to rebuild its cash balance to roughly $350BN from the latest $133BN in Treasury cash, a process that will require the aggressive gross and net issuance of T-Bills, liquidity in the system was set to collapse.

In fact, according to Bank of America the liquidity shortage over the next two months – a period in which as shown in the chart above the Treasury would aggressively be issuing bills – would be so acute, that the Fed may be forced to launch QE, a conclusion which JPMorgan echoed just days later.

QE, of course, refers to Quantitative Easing, the method by which the Federal Reserve tries to stimulate the economy through purchasing government-issued debt securities, such as U.S. Treasury bills and bonds. The Fed has used this extraordinary monetary policy for this purpose only three times in its 106 year history, all during the last decade as it attempted to prop up the U.S. economy whenever it faltered during the Great Recession after it cut interest rates to zero.

The Fed ended its last round of QE in 2015 and has been seeking to reduce its holdings of U.S. government-issued debt securities it acquired in the years since, which has been described as quantitative tightening.

But if the bond market’s liquidity runs dry because of the huge volume of new borrowing that the U.S. government seeks in order to fund its record levels of spending, then the Fed may be forced to fully reverse course and restart its QE programs to keep the bond market from seizing up and to prevent its developing liquidity crisis from cascading into other markets.

If that possibility sounds like something that would only happen during a financial crisis, that is because that is exactly what would be happening should that come to pass. All because too many politicians in Washington, D.C., were too willing put their political interests ahead of the fiscal discipline they could otherwise have exercised for the greater good, which would avoid the risks from Uncle Sam’s new borrowing binge altogether.

The post How Uncle Sam’s Borrowing Binge Might Spark a New Financial Crisis appeared first on The Beacon.

Regardless of how corporate America has used its access to tons of cheap new credit all these years (many companies, as is well known, have simply used it to buy back their own shares, whether it made sense or not, just to make their earnings per share look better), the result today is a highly dangerous level of debt at the heart of the economy.

Corporate debt was not one of the big culprits of the financial crisis a decade ago. But it might well be next time around. It has now reached $10 trillion, which means it is 60 percent higher than it was a decade ago. Its total size amounts to about half of the total size of the U.S. economy.

This is not a big deal, some may say, given that an overwhelming amount of corporate debt is rated as investment grade by rating agencies. But wasn’t that the case also with mortgage-related debt before the bubble burst in 2007/2008? Half of the debt given an investment grade by Standard & Poor’s today is actually bordering on junk status—i.e., its rating is the lowest in the investment grade scale. A total of $3 trillion in debt is currently in that situation. These companies’ debts can be downgraded to non-investment grade at any moment.

Nearly half of all outstanding corporate bonds will need to be refinanced before 2023, the year in which they will mature. Many companies will not be able to refinance their debt, given that their financial situation offers banks little guarantee that they will pay it off. The average debt-to-earnings ratio, not far from 4, is much higher than it was before the last financial crisis and nearing the level of the dotcom bubble. Clearly, a large number of corporations currently given the lowest investment grade by rating agencies are candidates for junk status. Once they are downgraded, they will trigger a massive sell-off by institutional investors such as pension funds whose rules do not allow them to invest in junk.

It doesn’t take much foresight to see that there won’t be many willing buyers of the bonds that these investors will have to dump on the market overnight, which in turn will cause a collapse in prices. Not to mention the disaster that the inability to refinance their debts will bring on the many corporations currently bearing the weight of too much debt relative to their earnings—that is, to their ability to service and repay it!

These realities are hidden below the surface of what currently looks like a dynamic economy with a rate of growth of 3.2 percent, according to the most recent data, and extremely low unemployment figures. It has always been the case with the consequences of currency manipulation and artificial monetary stimuli—until those hidden consequences eventually come bursting out into the open, setting off a financial crisis across the system.

The fact that consumer price inflation has been subdued in recent years (in large part because households were behaving more responsibly, because corporations were not spending their credit in goods and services but in financial assets) does not mean that all that money printing has not been having perverse effects in other areas of the economy, as we will eventually find out the hard way.

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Sometimes fiction offers better lessons in political economy than reality. “Money Heist,” the Spanish TV series that is having a big global impact thanks to Netflix, gives us a very important one (no, I won’t spoil it).

The Premise: “The Professor” directs a gang of robbers who assault the Royal Mint of Spain in order to print 2.4 billion euros and hopefully take off with the money. His argument: we are not stealing from anyone because we are printing new notes, just as the central bank does today by creating euros out of thin air. The European Central Bank (just like the U.S. Federal Reserve) channels the newly created money to the banks. The only difference is that the robbers, all of whom have mountains of problems, want it for themselves.

All the monetary analysts of the world would not be able to instill in people such a powerful idea about what central banks have done since the beginning of the financial crisis. Although the Professor uses a cynical argument to justify the gang’s actions, there is a tacit lesson here: governments have indirectly been robbing people for years by creating money artificially under the cover of political sophisms that make it hard for folks to understand that they are the victims.

The robbers intend to print 2.4 billion euros. How much money has the European Central Bank created since the start of the financial crisis? About two thousand times more than the amount coveted by the Professor’s gang (a total of about three trillion).

By producing this money and maintaining interest rates very low, governments sought to stimulate the economy. The goal was to have people and businesses borrow and spend, and for governments to continue to incur debt while avoiding the high cost of servicing it. Never mind that the origin of the crisis had been a monumental indigestion of credit due to an insatiable appetite for borrowing. To avoid placing the weight of the recovery on the shoulders of those who had borrowed too much or used their credit to invest in useless ventures, i.e., on bringing back financial discipline to governments, businesses and households, central banks began to print money maniacally, as in “Money Heist.”

What’s the consequence of this? Where’s the robbery? One, many European households and businesses, as well as several governments, have more debt today than ten years ago. Two, interest rates, as usual after a monetary binge, are finally rising, which means that sooner or later those households, companies and governments will find themselves under significant stress. Finally, a part of the artificial money that central banks have channeled to the banks has been used by them to speculate in the stock market, feeding a new bubble.

Ten years ago, at the beginning of the financial crisis, the sum of household and corporate debt in the eurozone was equivalent to 148 percent of GDP; today it exceeds 160 percent. In France, corporate debt alone is already equivalent to 134 percent of GDP, while in the Netherlands household debt is almost three times higher than net disposable income. In Spain, government debt as a percentage of the economy is much more than double what it was at the beginning of the crisis. As for the stock market, in the United States the main indexes have tripled since 2009 despite the fact that economic growth has been fairly low on average during this decade.

When the next credit crisis occurs or the next stock market bubble bursts, folks should remember the hold-up that central banks have perpetrated by increasing the debt when the essential thing was to reduce it, and provoking speculative investments. And then they should think about the tacit lesson of “Money Heist.”

The post The Other Money Heist appeared first on The Beacon.

Hell or High Water, one of the most talked about films of 2016, is billed as a modern-day western, “heist crime,” or Bonnie and Clyde. A contemporary western is more apt, and its excellent acting, steady pace, tight story and screenplay will likely make it an Oscar contender. The film also makes me yearn for a day when filmmakers learn economics, because they could use that knowledge to take stories to new levels. What is now a well-crafted genre Western could have become a much better film if the screenwriters had eschewed the self-righteousness of the Occupy Wall Street crowd and given everyone humanity and dimension, not just the thieves and police.

Hell or High Water is low-budget film ($12 million production budget) with high production values, enlisting the acting chops of veteran actors Chris Pine, Ben Foster, Jeff Bridges, and Gil Billingham among others in only a slightly updated cops-and-robbers buddy film. Pine and Foster play brothers—Toby and Tanner—who set off to rob banks to save the family farm from imminent foreclosure by the local bank. Tanner, the rebellious older brother, has just been released from prison for killing their abusive father, and he provides a fitting contrast to the more cerebral and pacifist Toby, who plays the role of the dutiful son.

The two brothers execute a well-planned series of robberies focused on a regional bank’s small town branches, taking the cash from the drawers to avoid larger bills that could be traced. Crusty Texas Ranger Marcus Hamilton (Bridges) is put on the case with his mixed race (Comanche and Mexican) partner, Alberto Parker (Billingham). Hamilton is intentionally offensive, tossing off-color jokes to goad Parker, creating a tension that offsets the brotherly commitment that bonds Toby and Tanner. But it works as the partners come to accept each other’s foibles in their relentless pursuit of the brothers through West Texas.

Tanner, however, is near psychopathic, riding the rush of the heists, his familial loyalty barely keeping him in check. Only Toby’s genuine compassion bridles his older brother, who appears to be a hair’s breadth away from becoming a modern-day version of the murderous Depression Era outlaw Clyde Barrow. This delicate balance between violence and deference to his younger brother’s vision for the robberies—steal just enough to pay off the debt and back child support for his ex-wife and sons—keeps the brothers’ relationship on edge as each robbery ratchets up the stakes with higher levels of violence. In the end, as the Texas Rangers and local law enforcement close in, Tanner and Toby are forced to make choices that can potentially save one brother but not both.

The film works, although a more sophisticated knowledge of markets, bank operations, and housing finance could have significantly elevated the film’s story. The “banker as villain” motif plays on current Occupy Wall Street prejudices, but the bankers in the film are cardboard villains that don’t easily fit today’s world. If bankers were the villains (rather than, say, the Federal Reserve Board) in the recent housing and mortgage crisis, they were the big-city investment bankers, not the rural bankers of small communities like the ones robbed in Hell or High Water. In fact, today’s rural banks couldn’t be more different than the aloof, insensitive, and inconsiderate ones alluded to in the film. Small town banks focus on customer service at the retail level to compete, so they have to pay attention to customer interests. Even larger regional and national banks brand themselves on knowing their clients and customers, a characteristic abundantly clear in John Allison’s first-hand account of BB&T bank described in The Financial Crisis and the Free Market Cure.

Indeed, several scenes in Hell or High Water betray this local familiarity. As the rangers are interviewing a teller at the site of the first bank heist, she identifies the robbers as locals, based on their regional West Texas accents, even though ski masks covered their faces. In the next robbery, the teller (another woman) chats cordially with a local customer about his discovery of old coins that he is now depositing in his account. All the people working for the banks are depicted as nice, everyday people with real connections to each other. The banker-as-aloof-villain doesn’t show up in physical form until the very end of the movie, and instead maintains an invisible presence as motivator and plot driver for Toby. 

Clearly, Hell or High Water is attempting to tap into general dissatisfaction with banks in the wake of the 2008 financial crisis that triggered record foreclosures. But retail bankers, particularly those in rural areas, are working within the system and have few options and resources beyond what is in their customer accounts. To extend further loans to failing family farms, which operate in a declining industry, would have jeopardized the solvency of the bank and the hard-earned savings they entrusted in them. The film never alludes to this, even though it’s a point that should be obvious to anyone who has taken a high-school class in economics or personal finance.

Indeed, Toby and Tanner conduct their robberies as is if the cash in the teller drawers appears from a money tree, somehow unconnected to the funds that banks hold in larger accounts. They justify their theft based on the fiction that the money they steal is “the bank’s money,” not their neighbors and friends.

This is unfortunate. Toby’s conflicting attitudes toward the robberies and the violence associated with them could have been heightened if he believed that bank workers were torn between doing their jobs and their personal empathy for the families they serve, particularly when they are struggling. In the real world, these decisions are never easy. (We learn later that oil has been discovered on the property, which means Tanner and Toby’s family would have paid back their loan over time, but this opens up another massive plot hole that won’t be explored here.)

Of course, this complexity doesn’t play into the simplistic conspiracy theory that drives the underlying theme that demonizes business and bankers in particular. On the film’s website, the story hooks directed at audiences include statements such as “Those banks loaned the least they could, so they could swipe your mama’s land,” and “They took everything from your family.” Robbing banks is practical justice, indeed Western Justice, in the romanticized world of the Western Film.

This motif may satisfy the anti-capitalist bloodlust of the screenwriter and filmmakers, but it does a disservice to the viewer by cheapening the plot and diluting the richness of the story. In the end, we have a well-crafted update on the Western genre but a movie that falls short of the sophistication that could have made it a great film and prompted broader discussions.

More on the housing crisis can be found in

• Housing America, edited by Randall G. Holcombe and Ben Powell
• Boom and Bust Banking:The Causes and Cures of the Great Recession, edited by David Beckworth
• Financing Failure by Vern P. McKinley

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