lending market and its aftermath reflec Essays

4750 WordsDec 26, 201419 Pages
lending market and its aftermath reflects K&A paradigm: format should be to explain the KAM model, then identify the initial dislocation triggering the bubble,Describe the Aliber-paradigm. Explain utilizing the housing bubble that has occurred in the past 8 years. Also explain your position on the bubble housing crisis. Describe the stages of the bubble for the aliber-paradigm. Using the paradigm to explain problems in stock market and housing bubble burst. The Leir Center For Financial Bubble Research Working Paper #1 THE KINDLEBERGER-ALIBER-MINSKY PARADIGM AND THE GLOBAL SUBPRIME MORTGAGE MELTDOWN William V. Rapp, The New Jersey Institute of Technology, United States, rappw@adm.njit.edu ABSTRACT This paper analyzes the current…show more content…
Further as the KAM paradigm predicts, the subprime mortgage meltdown and its aftermath have brought numerous civil and criminal actions. For example, mortgage fraud in the US, including Federal and state prosecution, is growing dramatically. Suspicious activity reports related to mortgage fraud increased over 1000% between 1997 and 2005 and pending FBI mortgage fraud investigations rose from 436 in fiscal 2002 to 1210 in fiscal 2007 (Grant, 2008). The huge increases in the US mortgage market and its increasing complexity have opened many attractive opportunities for fraudsters across a range of financial activities and institutions. The most common frauds involve “property flipping” or other schemes to get proceeds from mortgages or property sales via misleading appraisals or false documentation. The SEC is also looking at insider trading related to unexpected write-downs by publicly traded companies with assets tied to mortgage-backed securities. Further plaintiffs’ lawyers and their clients have been active in making other claims such as misrepresentation or failure to disclose materials information, trying to recover some of the billions of dollars in losses. However, to grasp the subprime bubble and meltdown in its development, subsequent crash and current aftershocks, one must first understand the key changes that occurred in the financial markets for

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