Abstract

http://ssrn.com/abstract=2237817
 
 

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Wall Street and the Housing Bubble


Ing-Haw Cheng


Tuck School of Business at Dartmouth

Sahil Raina


University of Michigan, Ross School of Business

Wei Xiong


Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

March 2013

NBER Working Paper No. w18904

Abstract:     
We analyze whether mid-level managers in securitized finance were aware of the housing bubble and a looming crisis in 2004-2006 using their personal home transaction data. To the extent that the practice of securitization may have led to lax screening of subprime borrowers, we find that the average person in our sample did not expect it to lead to problems in the wider housing market. Certain groups of securitization agents were particularly aggressive in increasing their exposure to housing during this period, suggesting the need to expand the incentives-based view of the crisis to incorporate a role for beliefs.

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Date posted: March 22, 2013  

Suggested Citation

Cheng, Ing-Haw and Raina, Sahil and Xiong, Wei, Wall Street and the Housing Bubble (March 2013). NBER Working Paper No. w18904. Available at SSRN: http://ssrn.com/abstract=2237817

Contact Information

Ing-Haw Cheng (Contact Author)
Tuck School of Business at Dartmouth ( email )
Hanover, NH 03755
United States
Sahil Raina
University of Michigan, Ross School of Business ( email )
701 Tappan Street
Ann Arbor, MI 48109-1234
United States
Wei Xiong
Princeton University - Department of Economics ( email )
Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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