The Political Origins of the Financial Crisis: The Domestic and International Politics of Fannie Mae and Freddie Mac

2009 ◽  
Vol 80 (1) ◽  
pp. 17-24 ◽  
Author(s):  
HELEN THOMPSON
2013 ◽  
Vol 2013 ◽  
pp. 1-12
Author(s):  
Marcos Escobar ◽  
Tim Friederich ◽  
Luis Seco ◽  
Rudi Zagst

This paper extends the structural credit model with underlying stochastic volatility to a multidimensional framework. The model combines the Black/Cox framework with the Heston model interpreting the equity of a company as a down-and-out barrier call option on the company's assets. This implies a combination of local and stochastic volatility on the equity as well as other stylized features. In this paper, we allow for a correlation between the asset processes of different companies to incorporate dependency structures. An estimator for the correlation parameter is derived and tested in a recovery framework. With the help of this model, we examine the default risk of the two mortgage lenders Fannie Mae and Freddie Mac before their actual placement into federal conservatorship and show that their default risk severely increased during the financial crisis.


2019 ◽  
Vol 57 (1) ◽  
pp. 187-188

Sumit Agarwal of National University of Singapore reviews “Last Resort: The Financial Crisis and the Future of Bailouts,” by Eric A. Posner. The Econlit abstract of this book begins: “Argues that, in responding to the financial crisis that began in 2007, the US government violated the law and was able to gain control over AIG, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) early in the critical stage of the crisis—but it did so in the public interest.”


Author(s):  
Harry Nedelcu

The mid and late 2000s witnessed a proliferation of political parties in European party systems. Marxist, Libertarian, Pirate, and Animal parties, as well as radical-right and populist parties, have become part of an increasingly heterogeneous political spectrum generally dominated by the mainstream centre-left and centre-right. The question this article explores is what led to the surge of these parties during the first decade of the 21st century. While it is tempting to look at structural arguments or the recent late-2000s financial crisis to explain this proliferation, the emergence of these parties predates the debt-crisis and can not be described by structural shifts alone . This paper argues that the proliferation of new radical parties came about not only as a result of changes in the political space, but rather due to the very perceived presence and even strengthening of what Katz and Mair (1995) famously dubbed the "cartelization" of mainstream political parties.   Full text available at: https://doi.org/10.22215/rera.v7i1.210


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