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The Gateway Center at Bronx Terminal Market, in the West Bronx, is a shopping center that encompasses less than one million square feet of retail space, built on a 17 acres (7 ha) site that formerly held the Bronx Terminal Market, a wholesale fruit and vegetable market as well as the former Bronx House of Detention, so... |
The Bronx street grid is irregular. Like the northernmost part of upper Manhattan, the West Bronx's hilly terrain leaves a relatively free-style street grid. Much of the West Bronx's street numbering carries over from upper Manhattan, but does not match it exactly; East 132nd Street is the lowest numbered street in the... |
According to the 2010 Census, 53.5% of Bronx's population was of Hispanic, Latino, or Spanish origin (they may be of any race); 30.1% non-Hispanic Black or African American, 10.9% of the population was non-Hispanic White, 3.4% non-Hispanic Asian, 0.6% from some other race (non-Hispanic) and 1.2% of two or more races (n... |
As of 2010, 46.29% (584,463) of Bronx residents aged five and older spoke Spanish at home, while 44.02% (555,767) spoke English, 2.48% (31,361) African languages, 0.91% (11,455) French, 0.90% (11,355) Italian, 0.87% (10,946) various Indic languages, 0.70% (8,836) other Indo-European languages, and Chinese was spoken at... |
According to the 2009 American Community Survey, White Americans of both Hispanic and non-Hispanic origin represented over one-fifth (22.9%) of the Bronx's population. However, non-Hispanic whites formed under one-eighth (12.1%) of the population, down from 34.4% in 1980. Out of all five boroughs, the Bronx has the low... |
At the 2009 American Community Survey, Black Americans made the second largest group in the Bronx after Hispanics and Latinos. Blacks of both Hispanic and non-Hispanic origin represented over one-third (35.4%) of the Bronx's population. Blacks of non-Hispanic origin made up 30.8% of the population. Over 495,200 blacks ... |
In 2009, Hispanic and Latino Americans represented 52.0% of the Bronx's population. Puerto Ricans represented 23.2% of the borough's population. Over 72,500 Mexicans lived in the Bronx, and they formed 5.2% of the population. Cubans numbered over 9,640 members and formed 0.7% of the population. In addition, over 319,00... |
Multiracial Americans are also a sizable minority in the Bronx. People of multiracial heritage number over 41,800 individuals and represent 3.0% of the population. People of mixed Caucasian and African American heritage number over 6,850 members and form 0.5% of the population. People of mixed Caucasian and Native Amer... |
The office of Borough President was created in the consolidation of 1898 to balance centralization with local authority. Each borough president had a powerful administrative role derived from having a vote on the New York City Board of Estimate, which was responsible for creating and approving the city's budget and pro... |
Until March 1, 2009, the Borough President of the Bronx was Adolfo Carrión Jr., elected as a Democrat in 2001 and 2005 before retiring early to direct the White House Office of Urban Affairs Policy. His successor, Democratic New York State Assembly member Rubén Díaz, Jr., who won a special election on April 21, 2009 by... |
In the Presidential primary elections of February 5, 2008, Sen. Clinton won 61.2% of the Bronx's 148,636 Democratic votes against 37.8% for Barack Obama and 1.0% for the other four candidates combined (John Edwards, Dennis Kucinich, Bill Richardson and Joe Biden). On the same day, John McCain won 54.4% of the borough's... |
Since then, the Bronx has always supported the Democratic Party's nominee for President, starting with a vote of 2-1 for the unsuccessful Al Smith in 1928, followed by four 2-1 votes for the successful Franklin D. Roosevelt. (Both had been Governors of New York, but Republican former Gov. Thomas E. Dewey won only 28% o... |
The Bronx has often shown striking differences from other boroughs in elections for Mayor. The only Republican to carry the Bronx since 1914 was Fiorello La Guardia in 1933, 1937 and 1941 (and in the latter two elections, only because his 30-32% vote on the American Labor Party line was added to 22-23% as a Republican)... |
Education in the Bronx is provided by a large number of public and private institutions, many of which draw students who live beyond the Bronx. The New York City Department of Education manages public noncharter schools in the borough. In 2000, public schools enrolled nearly 280,000 of the Bronx's residents over 3 year... |
Educational attainment: In 2000, according to the U.S. Census, out of the nearly 800,000 people in the Bronx who were then at least 25 years old, 62.3% had graduated from high school and 14.6% held a bachelor's or higher college degree. These percentages were lower than those for New York's other boroughs, which ranged... |
Many public high schools are located in the borough including the elite Bronx High School of Science, Celia Cruz Bronx High School of Music, DeWitt Clinton High School, High School for Violin and Dance, Bronx Leadership Academy 2, Bronx International High School, the School for Excellence, the Morris Academy for Collab... |
In the 1990s, New York City began closing the large, public high schools in the Bronx and replacing them with small high schools. Among the reasons cited for the changes were poor graduation rates and concerns about safety. Schools that have been closed or reduced in size include John F. Kennedy, James Monroe, Taft, Th... |
The Bronx's evolution from a hot bed of Latin jazz to an incubator of hip hop was the subject of an award-winning documentary, produced by City Lore and broadcast on PBS in 2006, "From Mambo to Hip Hop: A South Bronx Tale". Hip Hop first emerged in the South Bronx in the early 1970s. The New York Times has identified 1... |
Beginning with the advent of beat match DJing, in which Bronx DJs (Disc Jockeys) including Grandmaster Flash, Afrika Bambaataa and DJ Kool Herc extended the breaks of funk records, a major new musical genre emerged that sought to isolate the percussion breaks of hit funk, disco and soul songs. As hip hop's popularity g... |
The Bronx is the home of the New York Yankees of Major League Baseball. The original Yankee Stadium opened in 1923 on 161st Street and River Avenue, a year that saw the Yankees bring home their first of 27 World Series Championships. With the famous facade, the short right field porch and Monument Park, Yankee Stadium ... |
The Bronx is home to several Off-Off-Broadway theaters, many staging new works by immigrant playwrights from Latin America and Africa. The Pregones Theater, which produces Latin American work, opened a new 130-seat theater in 2005 on Walton Avenue in the South Bronx. Some artists from elsewhere in New York City have be... |
The Bronx Museum of the Arts, founded in 1971, exhibits 20th century and contemporary art through its central museum space and 11,000 square feet (1,000 m2) of galleries. Many of its exhibitions are on themes of special interest to the Bronx. Its permanent collection features more than 800 works of art, primarily by ar... |
The Bronx has also become home to a peculiar poetic tribute, in the form of the Heinrich Heine Memorial, better known as the Lorelei Fountain from one of Heine's best-known works (1838). After Heine's German birthplace of Düsseldorf had rejected, allegedly for anti-Semitic motives, a centennial monument to the radical ... |
In 1899, the memorial, by the Berlin sculptor Ernst Gustav Herter (1846–1917), finally came to rest, although subject to repeated vandalism, in the Bronx, at 164th Street and the Grand Concourse, or Joyce Kilmer Park near today's Yankee Stadium. (In 1999, it was moved to 161st Street and the Concourse.) In 2007, Christ... |
The peninsular borough's maritime heritage is acknowledged in several ways.The City Island Historical Society and Nautical Museum occupies a former public school designed by the New York City school system's turn-of-the-last-century master architect C. B. J. Snyder. The state's Maritime College in Fort Schuyler (on the... |
The Bronx has several local newspapers, including The Bronx News, Parkchester News, City News, The Riverdale Press, Riverdale Review, The Bronx Times Reporter, Inner City Press (which now has more of a focus on national issues) and Co-Op City Times. Four non-profit news outlets, Norwood News, Mount Hope Monitor, Mott H... |
The City of New York has an official television station run by the NYC Media Group and broadcasting from Bronx Community College, and Cablevision operates News 12 The Bronx, both of which feature programming based in the Bronx. Co-op City was the first area in the Bronx, and the first in New York beyond Manhattan, to h... |
Mid-20th century movies set in the Bronx portrayed densely settled, working-class, urban culture. Hollywood films such as From This Day Forward (1946), set in Highbridge, occasionally delved into Bronx life. Paddy Chayefsky's Academy Award-winning Marty was the most notable examination of working class Bronx life was a... |
Starting in the 1970s, the Bronx often symbolized violence, decay, and urban ruin. The wave of arson in the South Bronx in the 1960s and 1970s inspired the observation that "The Bronx is burning": in 1974 it was the title of both a New York Times editorial and a BBC documentary film. The line entered the pop-consciousn... |
Bronx gang life was depicted in the 1974 novel The Wanderers by Bronx native Richard Price and the 1979 movie of the same name. They are set in the heart of the Bronx, showing apartment life and the then-landmark Krums ice cream parlor. In the 1979 film The Warriors, the eponymous gang go to a meeting in Van Cortlandt ... |
The 1981 film Fort Apache, The Bronx is another film that used the Bronx's gritty image for its storyline. The movie's title is from the nickname for the 41st Police Precinct in the South Bronx which was nicknamed "Fort Apache". Also from 1981 is the horror film Wolfen making use of the rubble of the Bronx as a home fo... |
Bronx native Nancy Savoca's 1989 comedy, True Love, explores two Italian-American Bronx sweethearts in the days before their wedding. The film, which debuted Annabella Sciorra and Ron Eldard as the betrothed couple, won the Grand Jury Prize at that year's Sundance Film Festival. The CBS television sitcom Becker, 1998–2... |
Penny Marshall's 1990 film Awakenings, which was nominated for several Oscars, is based on neurologist Oliver Sacks' 1973 account of his psychiatric patients at Beth Abraham Hospital in the Bronx who were paralyzed by a form of encephalitis but briefly responded to the drug L-dopa. Robin Williams played the physician; ... |
The Bronx has been featured significantly in fiction literature. All of the characters in Herman Wouk's City Boy: The Adventures of Herbie Bookbinder (1948) live in the Bronx, and about half of the action is set there. Kate Simon's Bronx Primitive: Portraits of a Childhood is directly autobiographical, a warm account o... |
By contrast, Tom Wolfe's Bonfire of the Vanities (1987) portrays a wealthy, white protagonist, Sherman McCoy, getting lost off the Major Deegan Expressway in the South Bronx and having an altercation with locals. A substantial piece of the last part of the book is set in the resulting riotous trial at the Bronx County ... |
It threatened the collapse of large financial institutions, which was prevented by the bailout of banks by national governments, but stock markets still dropped worldwide. In many areas, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant ro... |
The bursting of the U.S. (United States) housing bubble, which peaked in 2004, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. The financial crisis was triggered by a complex interplay of policies that encouraged home ownership, providing easier acc... |
Many causes for the financial crisis have been suggested, with varying weight assigned by experts. The U.S. Senate's Levin–Coburn Report concluded that the crisis was the result of "high risk, complex financial products; undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the m... |
As part of the housing and credit booms, the number of financial agreements called mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which derived their value from mortgage payments and housing prices, greatly increased. Such financial innovation enabled institutions and investors around the w... |
Falling prices also resulted in homes worth less than the mortgage loan, providing a financial incentive to enter foreclosure. The ongoing foreclosure epidemic that began in late 2006 in the U.S. continues to drain wealth from consumers and erodes the financial strength of banking institutions. Defaults and losses on o... |
While the housing and credit bubbles were building, a series of factors caused the financial system to both expand and become increasingly fragile, a process called financialization. U.S. Government policy from the 1970s onward has emphasized deregulation to encourage business, which resulted in less oversight of activ... |
These institutions, as well as certain regulated banks, had also assumed significant debt burdens while providing the loans described above and did not have a financial cushion sufficient to absorb large loan defaults or MBS losses. These losses impacted the ability of financial institutions to lend, slowing economic a... |
The U.S. Financial Crisis Inquiry Commission reported its findings in January 2011. It concluded that "the crisis was avoidable and was caused by: widespread failures in financial regulation, including the Federal Reserve’s failure to stem the tide of toxic mortgages; dramatic breakdowns in corporate governance includi... |
During a period of tough competition between mortgage lenders for revenue and market share, and when the supply of creditworthy borrowers was limited, mortgage lenders relaxed underwriting standards and originated riskier mortgages to less creditworthy borrowers. In the view of some analysts, the relatively conservativ... |
The majority report of the Financial Crisis Inquiry Commission, written by the six Democratic appointees, the minority report, written by 3 of the 4 Republican appointees, studies by Federal Reserve economists, and the work of several independent scholars generally contend that government affordable housing policy was ... |
In his dissent to the majority report of the Financial Crisis Inquiry Commission, American Enterprise Institute fellow Peter J. Wallison stated his belief that the roots of the financial crisis can be traced directly and primarily to affordable housing policies initiated by HUD in the 1990s and to massive risky loan pu... |
In the early and mid-2000s, the Bush administration called numerous times for investigation into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003, the House Financial Services Committee held a hearing at the urging of the administration to assess safety and ... |
A 2000 United States Department of the Treasury study of lending trends for 305 cities from 1993 to 1998 showed that $467 billion of mortgage lending was made by Community Reinvestment Act (CRA)-covered lenders into low and mid level income (LMI) borrowers and neighborhoods, representing 10% of all U.S. mortgage lendin... |
To other analysts the delay between CRA rule changes (in 1995) and the explosion of subprime lending is not surprising, and does not exonerate the CRA. They contend that there were two, connected causes to the crisis: the relaxation of underwriting standards in 1995 and the ultra-low interest rates initiated by the Fed... |
Others have pointed out that there were not enough of these loans made to cause a crisis of this magnitude. In an article in Portfolio Magazine, Michael Lewis spoke with one trader who noted that "There weren’t enough Americans with [bad] credit taking out [bad loans] to satisfy investors' appetite for the end product.... |
Countering Krugman, Peter J. Wallison wrote: "It is not true that every bubble—even a large bubble—has the potential to cause a financial crisis when it deflates." Wallison notes that other developed countries had "large bubbles during the 1997–2007 period" but "the losses associated with mortgage delinquencies and def... |
Krugman's contention (that the growth of a commercial real estate bubble indicates that U.S. housing policy was not the cause of the crisis) is challenged by additional analysis. After researching the default of commercial loans during the financial crisis, Xudong An and Anthony B. Sanders reported (in December 2010): ... |
In a Peabody Award winning program, NPR correspondents argued that a "Giant Pool of Money" (represented by $70 trillion in worldwide fixed income investments) sought higher yields than those offered by U.S. Treasury bonds early in the decade. This pool of money had roughly doubled in size from 2000 to 2007, yet the sup... |
The collateralized debt obligation in particular enabled financial institutions to obtain investor funds to finance subprime and other lending, extending or increasing the housing bubble and generating large fees. This essentially places cash payments from multiple mortgages or other debt obligations into a single pool... |
By September 2008, average U.S. housing prices had declined by over 20% from their mid-2006 peak. As prices declined, borrowers with adjustable-rate mortgages could not refinance to avoid the higher payments associated with rising interest rates and began to default. During 2007, lenders began foreclosure proceedings o... |
Lower interest rates encouraged borrowing. From 2000 to 2003, the Federal Reserve lowered the federal funds rate target from 6.5% to 1.0%. This was done to soften the effects of the collapse of the dot-com bubble and the September 2001 terrorist attacks, as well as to combat a perceived risk of deflation. As early as 2... |
Bernanke explained that between 1996 and 2004, the U.S. current account deficit increased by $650 billion, from 1.5% to 5.8% of GDP. Financing these deficits required the country to borrow large sums from abroad, much of it from countries running trade surpluses. These were mainly the emerging economies in Asia and oil... |
The Fed then raised the Fed funds rate significantly between July 2004 and July 2006. This contributed to an increase in 1-year and 5-year adjustable-rate mortgage (ARM) rates, making ARM interest rate resets more expensive for homeowners. This may have also contributed to the deflating of the housing bubble, as asset ... |
Testimony given to the Financial Crisis Inquiry Commission by Richard M. Bowen III on events during his tenure as the Business Chief Underwriter for Correspondent Lending in the Consumer Lending Group for Citigroup (where he was responsible for over 220 professional underwriters) suggests that by the final years of the... |
In separate testimony to Financial Crisis Inquiry Commission, officers of Clayton Holdings—the largest residential loan due diligence and securitization surveillance company in the United States and Europe—testified that Clayton's review of over 900,000 mortgages issued from January 2006 to June 2007 revealed that scar... |
Predatory lending refers to the practice of unscrupulous lenders, enticing borrowers to enter into "unsafe" or "unsound" secured loans for inappropriate purposes. A classic bait-and-switch method was used by Countrywide Financial, advertising low interest rates for home refinancing. Such loans were written into extensi... |
Countrywide, sued by California Attorney General Jerry Brown for "unfair business practices" and "false advertising" was making high cost mortgages "to homeowners with weak credit, adjustable rate mortgages (ARMs) that allowed homeowners to make interest-only payments". When housing prices decreased, homeowners in ARMs... |
Critics such as economist Paul Krugman and U.S. Treasury Secretary Timothy Geithner have argued that the regulatory framework did not keep pace with financial innovation, such as the increasing importance of the shadow banking system, derivatives and off-balance sheet financing. A recent OECD study suggest that bank re... |
Prior to the crisis, financial institutions became highly leveraged, increasing their appetite for risky investments and reducing their resilience in case of losses. Much of this leverage was achieved using complex financial instruments such as off-balance sheet securitization and derivatives, which made it difficult f... |
From 2004 to 2007, the top five U.S. investment banks each significantly increased their financial leverage (see diagram), which increased their vulnerability to a financial shock. Changes in capital requirements, intended to keep U.S. banks competitive with their European counterparts, allowed lower risk weightings fo... |
Behavior that may be optimal for an individual (e.g., saving more during adverse economic conditions) can be detrimental if too many individuals pursue the same behavior, as ultimately one person's consumption is another person's income. Too many consumers attempting to save (or pay down debt) simultaneously is called ... |
During April 2009, U.S. Federal Reserve vice-chair Janet Yellen discussed these paradoxes: "Once this massive credit crunch hit, it didn’t take long before we were in a recession. The recession, in turn, deepened the credit crunch as demand and employment fell, and credit losses of financial institutions surged. Indeed... |
The term financial innovation refers to the ongoing development of financial products designed to achieve particular client objectives, such as offsetting a particular risk exposure (such as the default of a borrower) or to assist with obtaining financing. Examples pertinent to this crisis included: the adjustable-rate... |
CDO issuance grew from an estimated $20 billion in Q1 2004 to its peak of over $180 billion by Q1 2007, then declined back under $20 billion by Q1 2008. Further, the credit quality of CDO's declined from 2000 to 2007, as the level of subprime and other non-prime mortgage debt increased from 5% to 36% of CDO assets. As ... |
This boom in innovative financial products went hand in hand with more complexity. It multiplied the number of actors connected to a single mortgage (including mortgage brokers, specialized originators, the securitizers and their due diligence firms, managing agents and trading desks, and finally investors, insurances ... |
The pricing of risk refers to the incremental compensation required by investors for taking on additional risk, which may be measured by interest rates or fees. Several scholars have argued that a lack of transparency about banks' risk exposures prevented markets from correctly pricing risk before the crisis, enabled t... |
For a variety of reasons, market participants did not accurately measure the risk inherent with financial innovation such as MBS and CDOs or understand its impact on the overall stability of the financial system. For example, the pricing model for CDOs clearly did not reflect the level of risk they introduced into the ... |
Another example relates to AIG, which insured obligations of various financial institutions through the usage of credit default swaps. The basic CDS transaction involved AIG receiving a premium in exchange for a promise to pay money to party A in the event party B defaulted. However, AIG did not have the financial stre... |
As financial assets became more and more complex, and harder and harder to value, investors were reassured by the fact that both the international bond rating agencies and bank regulators, who came to rely on them, accepted as valid some complex mathematical models which theoretically showed the risks were much smaller... |
Moreover, a conflict of interest between professional investment managers and their institutional clients, combined with a global glut in investment capital, led to bad investments by asset managers in over-priced credit assets. Professional investment managers generally are compensated based on the volume of client as... |
Despite the dominance of the above formula, there are documented attempts of the financial industry, occurring before the crisis, to address the formula limitations, specifically the lack of dependence dynamics and the poor representation of extreme events. The volume "Credit Correlation: Life After Copulas", published... |
In a June 2008 speech, President and CEO of the New York Federal Reserve Bank Timothy Geithner—who in 2009 became Secretary of the United States Treasury—placed significant blame for the freezing of credit markets on a "run" on the entities in the "parallel" banking system, also called the shadow banking system. These ... |
The securitization markets supported by the shadow banking system started to close down in the spring of 2007 and nearly shut-down in the fall of 2008. More than a third of the private credit markets thus became unavailable as a source of funds. According to the Brookings Institution, the traditional banking system doe... |
Economist Mark Zandi testified to the Financial Crisis Inquiry Commission in January 2010: "The securitization markets also remain impaired, as investors anticipate more loan losses. Investors are also uncertain about coming legal and accounting rule changes and regulatory reforms. Private bond issuance of residential ... |
Rapid increases in a number of commodity prices followed the collapse in the housing bubble. The price of oil nearly tripled from $50 to $147 from early 2007 to 2008, before plunging as the financial crisis began to take hold in late 2008. Experts debate the causes, with some attributing it to speculative flow of money... |
In testimony before the Senate Committee on Commerce, Science, and Transportation on June 3, 2008, former director of the CFTC Division of Trading & Markets (responsible for enforcement) Michael Greenberger specifically named the Atlanta-based IntercontinentalExchange, founded by Goldman Sachs, Morgan Stanley and BP as... |
Feminist economists Ailsa McKay and Margunn Bjørnholt argue that the financial crisis and the response to it revealed a crisis of ideas in mainstream economics and within the economics profession, and call for a reshaping of both the economy, economic theory and the economics profession. They argue that such a reshapin... |
Current Governor of the Reserve Bank of India Raghuram Rajan had predicted the crisis in 2005 when he became chief economist at the International Monetary Fund.In 2005, at a celebration honouring Alan Greenspan, who was about to retire as chairman of the US Federal Reserve, Rajan delivered a controversial paper that wa... |
The financial crisis was not widely predicted by mainstream economists except Raghuram Rajan, who instead spoke of the Great Moderation. A number of heterodox economists predicted the crisis, with varying arguments. Dirk Bezemer in his research credits (with supporting argument and estimates of timing) 12 economists wi... |
A cover story in BusinessWeek magazine claims that economists mostly failed to predict the worst international economic crisis since the Great Depression of the 1930s. The Wharton School of the University of Pennsylvania's online business journal examines why economists failed to predict a major global financial crisis... |
Stock trader and financial risk engineer Nassim Nicholas Taleb, author of the 2007 book The Black Swan, spent years warning against the breakdown of the banking system in particular and the economy in general owing to their use of bad risk models and reliance on forecasting, and their reliance on bad models, and framed... |
Market strategist Phil Dow believes distinctions exist "between the current market malaise" and the Great Depression. He says the Dow Jones average's fall of more than 50% over a period of 17 months is similar to a 54.7% fall in the Great Depression, followed by a total drop of 89% over the following 16 months. "It's v... |
One of the first victims was Northern Rock, a medium-sized British bank. The highly leveraged nature of its business led the bank to request security from the Bank of England. This in turn led to investor panic and a bank run in mid-September 2007. Calls by Liberal Democrat Treasury Spokesman Vince Cable to nationalise... |
The first visible institution to run into trouble in the United States was the Southern California–based IndyMac, a spin-off of Countrywide Financial. Before its failure, IndyMac Bank was the largest savings and loan association in the Los Angeles market and the seventh largest mortgage originator in the United States.... |
IndyMac often made loans without verification of the borrower’s income or assets, and to borrowers with poor credit histories. Appraisals obtained by IndyMac on underlying collateral were often questionable as well. As an Alt-A lender, IndyMac’s business model was to offer loan products to fit the borrower’s needs, usi... |
IndyMac reported that during April 2008, Moody's and Standard & Poor's downgraded the ratings on a significant number of Mortgage-backed security (MBS) bonds including $160 million of those issued by IndyMac and which the bank retained in its MBS portfolio. IndyMac concluded that these downgrades would have negatively ... |
Senator Charles Schumer (D-NY) would later point out that brokered deposits made up more than 37 percent of IndyMac's total deposits and ask the Federal Deposit Insurance Corporation (FDIC) whether it had considered ordering IndyMac to reduce its reliance on these deposits. With $18.9 billion in total deposits reported... |
When home prices declined in the latter half of 2007 and the secondary mortgage market collapsed, IndyMac was forced to hold $10.7 billion of loans it could not sell in the secondary market. Its reduced liquidity was further exacerbated in late June 2008 when account holders withdrew $1.55 billion or about 7.5% of Indy... |
On July 11, 2008, citing liquidity concerns, the FDIC put IndyMac Bank into conservatorship. A bridge bank, IndyMac Federal Bank, FSB, was established to assume control of IndyMac Bank's assets, its secured liabilities, and its insured deposit accounts. The FDIC announced plans to open IndyMac Federal Bank, FSB on July... |
Initially the companies affected were those directly involved in home construction and mortgage lending such as Northern Rock and Countrywide Financial, as they could no longer obtain financing through the credit markets. Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear S... |
In September 2008, the crisis hit its most critical stage. There was the equivalent of a bank run on the money market funds, which frequently invest in commercial paper issued by corporations to fund their operations and payrolls. Withdrawal from money markets were $144.5 billion during one week, versus $7.1 billion th... |
Economist Paul Krugman and U.S. Treasury Secretary Timothy Geithner explain the credit crisis via the implosion of the shadow banking system, which had grown to nearly equal the importance of the traditional commercial banking sector as described above. Without the ability to obtain investor funds in exchange for most ... |
This meant that nearly one-third of the U.S. lending mechanism was frozen and continued to be frozen into June 2009. According to the Brookings Institution, the traditional banking system does not have the capital to close this gap as of June 2009: "It would take a number of years of strong profits to generate sufficie... |
There is a direct relationship between declines in wealth and declines in consumption and business investment, which along with government spending, represent the economic engine. Between June 2007 and November 2008, Americans lost an estimated average of more than a quarter of their collective net worth.[citation need... |
In November 2008, economist Dean Baker observed: "There is a really good reason for tighter credit. Tens of millions of homeowners who had substantial equity in their homes two years ago have little or nothing today. Businesses are facing the worst downturn since the Great Depression. This matters for credit decisions.... |
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