The Subprime Solution《my book report on that.》

下面是我曾经写的book report感兴趣的朋友可以拿此书来看。

我简单说说这书，

作者对于美国房产经济做了一番研究，此书有详细的对于次贷以前类似房产经纪引发的经济问题的研究。很多facts.从此你看书美国如何房地产经济的发展轨迹。

此书对于权威毫不吝啬的批评，认为次贷一个很重要的缘故，是因为媒体国民对于金融业某些人的 个人崇拜，比如格林斯潘。

书分两部分，前部分说次贷的原因，后半部分说解决措施。个人比较欣赏reasoning部分，引经据典提到20，30，40年代的局部的房产经纪的一些现象，这部分的facts很profound.

-The Subprime Solution by Robert J. Shiller

‘The ultimate cause of the global financial crisis is the psychology of the real estate bubble’ Robert J. Shiller said ‘but it appears that most people have not taken this view to heart.’1

Robert J. Shiller the renowned professor of economics at Yale University as well as the expert on U.S. housing markets noted in the book ‘The Subprime Solution How Today’s Global Financial Crisis Happened and what to Do About it’ that the core of the problem is the irrational public enthusiasm for housing investment.2

How the crisis spread? Shiller attributed it to the chains of events which real estate speculators mortgage brokers underwriters ratings agencies borrowers appraisers and investment bankers all played their roles in. With a social contagion of belief that it is real ‘boom’ rather than ‘bubble’ an optimistic view of the market is widespread. The ‘great intelligence’ at that time Alan Greenspan in his 2007 book The Age of Turbulence said that ‘We were facing not a bubble but froth—lots of small local bubbles never grew to a scale that could overall threaten the economy.’3 Shiller borrowed a term from economic theorists Sushil Bikhchandani that ‘Information Cascades’ occurs when the real intelligent people (the bubble foreseer) disregard their independent collected information and ‘act instead the general information’ with the mass belief. 4 Shiller also pointed that land speculation went far back into history (in 1930s) but the increase of the focus on real estate market can be related to the ‘aftereffects’ of the stock market boom of 1990s. A transformation of people’s thinking is in 2000 they expect to make a lot of money investing. They trust ‘smart investors ever more.’ 5 The deepest cause of the bubble may lie in ourselves6 Shiller wisely pointed it out and it maybe the reason that we can hardly unravel it.

In the book Shiller first used a lot of historic cases of US housing trying to compare and contrast the causes of the contemporary subprime crisis. While in the latter part he separates the solutions to the serious crisis: Short-term bailout and Long term regulations. His short-term solutions amount to merely a suggestion that we somehow muddle through with some bailouts as trying to minimize moral hazard. His long-term solutions propose to ‘improve the information infrastructure’. 7In my opinion these informational substitutes are concrete but somehow difficult to realize.