Panic fanned by a lack of transparency of the balance sheets of ma- mortgage payments, the losses—amplified by derivatives—rushed through the pipeline.
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,’,$.2.+-+.$”**1%/(,!+5))#0&))”43&%*(#/0/-#0″-)#’#’#/+$#)!)*,.)&&%*(#/0/-#0″-)#’#’#/+$#)!)*,.)&!4@@=%=(9>4+”057″5-“#=-=45!4@@=%=(9>4+”057″5-“#=-=45@?:*<0&68318$1!&5*1?8:*<%8;;?22?8:8:1!&%*/2&28$1!&@?:*:)?*<*:'")8:8;?)%3?2?2?:1!&,:?1&'.1*1&2"&+,*)$(#(%'(#$))!)($*)$#%'#$))!)$*####/3(*0,%-#42''$/3(*0,%-#42''$$!)"!$$)."1&+$!)"!$$)."1&+ PAGE - 3 ============ THE FINANCIAL CRISIS INQUIRY REPORT FINAL REPORT OF THE NATIONAL COMMISSION ON THE CAUSES OF THE FINANCIAL AND ECONOMIC CRISIS IN THE UNITED STATES OFFICIAL GOVERNMENT EDITIONTHE FINANCIAL CRISIS INQUIRY COMMISSION Submitted byPursuant to Public Law 111-21January 2011 PAGE - 5 ============ CONTENTS Commissionersvii Commissioner Votes.viii Commission Staff Listix Preface.xi CONCLUSIONSOFTHE FINANCIALCRISISINQUIRYCOMMISSION xvPARTI : CRISISONTHEHORIZON Chapter Before Our Very Eyes PARTII : SETTINGTHESTAGE Chapter Shadow Banking Chapter Securitization and Derivatives Chapter Deregulation Redux Chapter Subprime Lending PARTIII : THEBOOMANDBUST Chapter Credit Expansion Chapter The Mortgage Machine Chapter The CDO Machine Chapter All In Chapte The Madness Chapte The Bust v PAGE - 6 ============ PARTIV : THEUNRAVELING Chapte Earlpreading Subprime Worries Chapte Summuptions in Funding Chapte Lateo Earlillions in Subprime Losses Chapte Marche Fall of Bear Stearns Chapte March to Augusystemic Risk Concerns Chapte Septemb The Takeover of Fannie Mae and Freddie Mac Chapte Septembhe Bankruptcy of Lehman Chapte Septembhe Bailout of AIG Chapte Crisis and Panic PARTV : THEAFTERSHOCKS Chapte The Economic Fallout Chapte The Foreclosure Crisis DISSENTINGVIEWS By Keith Hennessey, Douglas Holtz-Eakin, and Bill Thomas By Peter J. Wallison Appendix A: Glossary Appendix B: List of Hearings and Witnesses Notes. Index available online at viCONTENTS 539545553 PAGE - 9 ============ Shaista I. Ahmed Hilary J. Allen Jonathan E. Armstrong Rob Bachmann Barton Baker Susan Baltake Bradley J. Bondi Sylvia Boone Tom Borgers Ron Borzekowski Mike Bryan Ryan Bubb Troy A. Burrus R. Richard Cheng Jennifer Vaughn Collins Matthew Cooper Alberto Crego Victor J. Cunicelli Jobe G. Danganan Sam Davidson Elizabeth A. Del Real Kirstin Downey Karen Dubas Desi Duncker Bartly A. Dzivi Michael E. Easterly Alice Falk Megan L. Fasules Michael Flagg Sean J. Flynn, Jr. Scott C. Ganz Thomas Greene Maryann Haggerty Robert C. Hinkley Anthony C. Ingoglia Ben Jacobs Peter Adrian Kavounas Michael Keegan Thomas J. Keegan Brook L. Kellerman Sarah Knaus Thomas L. Krebs Jay N. Lerner Jane E. Lewin Susan Mandel Julie A. Marcacci Alexander Maasry Courtney Mayo Carl McCarden Bruce G. McWilliams Menjie L. Medina Joel Miller Steven L. Mintz Clara Morain Girija Natarajan Gretchen Kinney Newsom Dixie Noonan Donna K. Norman Adam M. Paul Jane D. Poulin Andrew C. Robinson Steve Sanderford Ryan Thomas Schulte Lorretto J. Scott Skipper Seabold Kim Leslie Shafe Gordon Shemin Stuart C. P. Shroff Alexis Simendinger Mina Simhai Jeffrey Smith Thomas H. Stanton Landon W. Stroebel Brian P. Sylvester Shirley Tang Fereshteh Z. Vahdati Antonio A. Vargas Cornejo Melana Zyla Vicker George Wahl Tucker Warren Cassidy D. Waskowicz Arthur E. Wilmarth, Jr. Sarah Zuckerman ixCOMMISSION STAFF Wendy Edelberg Executive Director Gary J. Co General Counsel Chris Seefer, Director of Investigations Greg Feldberg, Director of Research PAGE - 11 ============ PREFACE The Financial Crisis Inquiry Commission was created to “examine the causes of the currenncial and economic crisis in the United States.” In this report, the Com- mission presents to the President, the Congress, and the American people the results of its examination and its conclusions as to the causes of the crisis. More than two years after the worst of thncial crisis, our economy, as well as communities and families across the country, continues to experience the after- shocks. Millions of Americans have lost their jobs and their homes, and the economy is still struggling to rebound. This report is intended to provide a historical account- ing of what brought oncial system and economy to a precipice and to help pol- icy makers and the public better understand how this calamity came to be. The Commission was established as part of the Fraud Enforcement and Recovery Act (Public Laassed by Congress and signed by the President in May endenber panel was composed of private citizens with ex- perience in areas such as housing, econonce, market regulation, banking, and consumer protection. Six members of the Commission were appointed by the Democratic leadership of Congress and four members by the Republican leadership. The Commission’s statutory instructions set ouopics for inquiry and called for the examination of the collapse of majoncial institutions that failed or would have failed if not for exceptional assistance from the government. This report fuhese mandates. In addition, the Commission was instructed to refer to the at- torney general of the United States and any appropriate state attorney general any person that the Commission found may have violated the laws of the United States in relation to the crisis. Where the Commission found such potential violations, it re- ferred those matters to the appropriate authorities. The Commission used the au- thority it was given to issue subpoenas to compel testimony and the production of documents, but in the vast majority of instances, companies and individuals volun- tarily cooperated with this inquiry. In the course of its research and investigation, the Commission reviewed millions of pages of documents, interviewed more thantnesses, anys of public hearings in New York, Washington, D.C., and communities across the country xi 73 KB – 662 Pages