Financial Crises

Foreign Affairs Article

Indonesia in Pieces

Author: Elizabeth Pisani

In April, voters in Indonesia's parliamentary elections shocked many observers, confounded most pollsters, and seemed to set back their own long-term interests by failing to deliver a massive victory to the main opposition party, the Indonesian Democratic Party of Struggle.

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Foreign Affairs Article

Blind Oracle

Author: Richard Katz

In his recent essay "Never Saw It Coming" (November/December 2013), Alan Greenspan makes two central arguments: first, that virtually no one foresaw the 2008 U.S. financial crisis and, second, that irrational "animal spirits" were the root cause.

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Primary Sources

Federal Reserve Chair Semiannual Monetary Policy Report to the Congress

These semiannual reports and testimony are required by the Federal Reserve Act and are submitted to the Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services. The Monetary Policy report and related testimony are the Federal Reserve's analysis of "the conduct of monetary policy and economic developments and prospects for the future."

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Must Read

Project Syndicate: An Agenda to Save the Euro

Author: Joseph E. Stiglitz

"If the eurozone adopts the program outlined above, there should be no need for Germany to pick up any tab. But under the perverse policies that Europe has adopted, one debt restructuring has been followed by another. If Germany and the other northern European countries continue to insist on pursuing current policies, they, together with their southern neighbors, will wind up paying a high price."

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Foreign Affairs Article

Never Saw It Coming

Author: Alan Greenspan

The former chair of the U.S. Federal Reserve asks how so many experts, including him, failed to see the 2008 financial crisis approaching. An important part of the answer to that question is a very old idea: Keynesian "animal spirits," the irrational elements of decisionmaking that have been left out of economic forecasting for too long.

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Must Read

New York Times: Treasure Hunters of the Financial Crisis

Author: Peter Lattman

"Much attention has been lavished on the speculators who reaped huge paydays betting against the subprime mortgages that stoked the financial crisis. Doomsayers like the hedge fund manager John Paulson and the cast of characters in "The Big Short," the Michael Lewis book, saw calamity coming, and their contrarian bets delivered when the housing market collapsed.

But what about the big long? During the dark days of late 2008, while other investors dumped their holdings or sat paralyzed on the sidelines, who decided that it was time to put money on the line? Who bought low and then sold high?"

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Must Read

Financial Times: Optimism About an End to the Euro Crisis Is Wrong

Author: Wolfgang Münchau

"In a monetary union, adjustment is hard without any transfers and without a fiscal union. I know of no plausible plan how the eurozone can manage the dual feat of economic adjustment and debt sustainability within the straitjacket of official policy. And as long as such a plan does not exist, the crisis is not over."

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Must Read

Project Syndicate: The Eurozone’s Calm Before the Storm

Author: Nouriel Roubini

"So far, the grand bargain between the core and the periphery has held up: the periphery continues austerity and reform while the core remains patient and provides financing. But the eurozone's political strains may soon reach a breaking point, with populist anti-austerity parties in the periphery and populist anti-euro and anti-bailout parties in the core possibly gaining the upper hand in next year's European Parliament elections."

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Transcript

HBO History Makers: Understanding the 2008 Financial Crisis

Speakers: Barney Frank and Henry M. Paulson, Jr.
Presider: David Wessel

Barney Frank and Henry M. Paulson Jr. look back at the 2008 financial crisis, the ongoing recovery process, and lessons learned from their unique perspectives.

In collaboration with the Council on Foreign Relations, the Home Box Office History Makers Series sponsors speakers whose contributions made a prominent impact at a critical juncture in history.

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