WASHINGTON—June 16, 2008—In a three-part Washington Post series, Alec Klein and Zachary Goldfarb present one of the first comprehensive narratives explaining the recent U.S. housing market collapse.
Klein and Goldfarb describe how efforts to counter the pain of the dot-com boom and bust in the 1990's pumped air into the housing market bubble, setting the stage for what became one of the biggest financial crises of the new century.
This series breaks new ground in describing what happened between high-level officials at the Federal Reserve, the U.S. Treasury and on Capitol Hill behind closed doors. Klein and Goldfarb interview Alan Greenspan and a number of other key players.
The first installment, published yesterday, investigates the causes of the housing market crisis, looking into wrongdoing of mortgage brokers, lax lending standards of banks, failures of watchdogs and actions by the Bush Administration and Federal Reserve to stave off recession.
Today's installment describes events that revealed the severe problems brewing in the subprime mortgage industry. Klein and Goldfarb report that in August 2007, while the Fed maintained an outward calm, Bernanke and other officials met several times a day in a makeshift war room to decide how the central bank should respond to the crisis, how aggressive its influence should be on interest rates and what risk the credit problems posed to average Americans.
Tomorrow the series concludes with a look at how the implosion of the subprime market is affecting Wall Street and the broader economy. Klein and Goldfarb explain how the Fed is responding and forecast reverberations still to come. Plus, Alan Greenspan shares his perspective in an interview.
The full series in addition to multimedia and other interactive elements is available at the following link:www.washingtonpost.com/creditcrisis
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