Does one exist?
ive found bits of research and some videos online but i havent seen a comprehensive study of how this crisis came about with good detail.

if anyone has any links please post them, thanks.

10/6/2008 1:26:26 PM

it will still take time before a fully comprehensive study is done, because we're still in the middle of this crisis. But there are some good sources for what has happened up to this point.

Here's a very good interview with Kevin Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
http://www.pbs.org/moyers/journal/09192008/watch2.html

pretty much any interview on Bill Moyer's Journal that is about the economy you can be sure it's good
http://www.pbs.org/moyers/journal/archives/archives.php


Somewhat strangely, two of the best stories I've heard trying to explain how this all happened came from This American Life, not exactly a place you would turn to to get financial news
"The Giant Pool of Money" - http://www.thislife.org/Radio_Episode.aspx?episode=355
"Another Frightening Show About the Economy" - http://thislife.org/Radio_Episode.aspx?episode=365

Bloomberg also has a good series of podcasts
http://www.bloomberg.com/tvradio/podcast/

10/6/2008 1:34:55 PM

Quote :

"Comprehensive study on the economic crisis "

lol

I just learned this btw, from "the wiki"...

"The Austrian School, also known as the “Vienna School” or the “Psychological School”, is a heterodox[1] school of economics that advocates adherence to strict methodological individualism."

"Austrian economists reject statistical methods and artificially constructed experiments as tools applicable to economics, saying that while it is appropriate in the natural sciences where factors can be isolated in laboratory conditions, the actions of human beings are too complex for this treatment. Instead one should isolate the logical processes of human action - a discipline named "praxeology" by Alfred Espinas."


http://en.wikipedia.org/wiki/Austrian_School

10/6/2008 1:49:59 PM

The culprit isn't a mystery and hasn't been since at least 2006 when I learned about it working in the financial industry. The studies point to illness and injury and problems associated with them.

http://works.bepress.com/christopher_robertson/2/

From the abstract of this more recent study on the phenomena:

Quote :

"The “standard account” of home foreclosure attributes this spike to loose lending practices, irresponsible borrowers, a flat real estate market, and rising interest rates. Based on our study of homeowners going through foreclosures in four states, we find that the standard account fails to represent the facts and thus makes a poor guide for policy. In contrast, we find that half of all foreclosures have medical causes, and we estimate that medical crises put 1.5 million Americans in jeopardy of losing their homes last year. Half of all respondents (49%) indicated that their foreclosure was caused in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%), those currently disabled and unable to work (8%), and those who used their home equity to pay medical bills (13%). Altogether, seven in ten respondents (69%) reported at least one of these factors."

10/6/2008 2:34:05 PM

The results of any comprehensive study on this situation would be too antisemitic.

10/6/2008 2:59:27 PM

Interesting article, but it seems misleading in implying that it is medical problems that cause foreclosures.

The current population estimate for the US according to the Census Bureau is 305,348,134. Assuming that, in fact $1.5M homeowners lost their homes due to medical expenses, you're looking at 0.005% of the total population.

I'd wager that more than .005% of the population had a major medical emergency last year.

If you read the study itself:

Quote :

"We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%)"

Two weeks? Most remotely responsible financial advisers recommend that you have at least six months of expenses saved away for emergency situations. That would easily cover two weeks of missed work and $2000 of medical bills. In fairness, that only covers part of the sample group, but a significant part.

Now, the next argument is that no one should lose a home over medical bills and these probably were lower income homeowners unable to save enough for an emergency. Which begs the question, was a house a good purchase if they weren't able to save as well? I don't know, that is answered on a case by case basis.

Furthemore:

Quote :

"In many cases, homeowners were hit with a perfect storm of factors – a few thousand dollars of medical bills, a few weeks of missed work, and perhaps a divorce or rising interest rate – all combined to push them over the edge into foreclosure."

It hardly seems like you can point the finger at medical costs alone with that sort of statement.

I haven't read the entire article yet, but it brings up some points and I hope I'll get to it later, but it seems to me that the real reason is the inability to manage what amount to expected but unpredictable expenses, major medical care requirements being one of the most expensive and least predictable.

10/6/2008 3:04:35 PM

Quote :

"Interesting article, but it seems misleading in implying that it is medical problems that cause foreclosures."

It doesn't imply it. Those are its conclusions. Other studies have done the same.

From the abstract of another, slightly less recent one:

Quote :

"To investigate medical contributors to bankruptcy, we surveyed 1,771 personal bankruptcy filers in five federal courts and subsequently completed in-depth interviews with 931 of them. About half cited medical causes, which indicates that 1.9–2.2 million Americans (filers plus dependents) experienced medical bankruptcy. Among those whose illnesses led to bankruptcy, out-of-pocket costs averaged $11,854 since the start of illness; 75.7 percent had insurance at the onset of illness. Medical debtors were 42 percent more likely than other debtors to experience lapses in coverage. Even middle-class insured families often fall prey to financial catastrophe when sick."

http://content.healthaffairs.org/cgi/content/full/hlthaff.w5.63/DC1

Feel free to peruse the whole thing.

Quote :

"JCASHFAN: Two weeks? Most remotely responsible financial advisers recommend that you have at least six months of expenses saved away for emergency situations."

What percentage of the population seeks responsible financial advisers?

What percentage of that minority listen to and follow through with what they have to say?

This was a staggeringly weak dismissal of the evidence.

Huge numbers of people do not save ANY MONEY. AT ALL. So many in fact, that we have a flat-or-negative short-term savings rate in America.

Quote :

"JCASHFAN: the real reason is the inability to manage what amount to expected but unpredictable expenses, major medical care requirements being one of the most expensive and least predictable."

Which is exactly what the study (not article) is saying...

10/6/2008 4:30:58 PM

^ yes, people don't save. and that is part of what JCASH was saying. It wasn't the medical event itself that was the problem, but the lack of savings that did them in. The medical event just tipped the scales enough to cause them to fail. Thus, the real problem is that the people weren't in a good enough financial condition to purchase a house in the first place. That they then got sick and missed only two weeks of work is the proof.

10/6/2008 5:04:02 PM

^ Exactly.

I'm sorry, you're responsible for your own fiscal state. The old saw applies, "if you fail to plan, you plan to fail." Your irresponsibility does not become my responsibility.

That the medical system is fucked up is a legitimate issue, but trying to blame medical problems instead of poor fiscal planning for the mortgage crisis is asinine.

Again, my point that this study indicates that merely .005% of the population loses their house due to medical issues doesn't exactly hail a national crisis in my book.

10/6/2008 5:12:48 PM

and add to that: making your plan contingent on getting dealt a best case scenario does not count.

the amount of debt and pitiful amount of savings that we as a society carry is mind boggling. it's like playing russian roulette.

[Edited on October 6, 2008 at 5:22 PM. Reason : man, if i could convince people to be smart financially, not be fat, and not drive like idiots...]

10/6/2008 5:21:12 PM

ok, anyway, back to the original question.....

here are some more podcasts/interviews on the origins of the crisis
http://bigpicture.typepad.com/comments/2008/10/podcast-origins.html

10/6/2008 10:25:33 PM

excellent video,

this one really hits the nail on the head,

http://www.pbs.org/moyers/journal/09192008/watch2.html

10/7/2008 12:29:01 AM

Anatomy of a Train Wreck: Causes of the Mortgage Meltdown
Stan Liebowitz
http://www.independent.org/pdf/policy_reports/2008-10-03-trainwreck.pdf

about 25 pages. talks mostly about lending standards. looks at stats of foreclosures for prime/subprime + fixed/adjustable rate.

10/7/2008 1:08:22 AM

^havent seen that, i'll read it tomorrow


heres anotehr great speech by kevin phillips

http://video.google.com/videoplay?docid=3035415655640961960&ei=nOXqSN7HH5LAqAKT--XFBw&q=kevin+phillips

[Edited on October 7, 2008 at 2:16 AM. Reason : .]

10/7/2008 2:15:43 AM

here's another good summary and writeup of what's happened in the past 10 years, or mostly since the .com crash
http://www.theoildrum.com/node/4629

10/10/2008 11:29:40 AM