Credit crises : from tainted loans to a global economic meltdown /

Credit crises : from tainted loans to a global economic meltdown /

The subprime crisis marked the end of an almost five-year-long period of prosperity in financial markets. At the beginning of the crisis, the majority of market participants believed in a geographically limited impact on some specific segments; during the course of 2007 it became obvious that the su...

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Bibliographic Details
Main Author: Felsenheimer, Jochen
Other Authors: Gisdakis, Philip
Format: Book
Language:English
Published: Weinheim : Wiley-VCH, [2008], ©2008
Weinheim : c2008
Weinheim : ©2008
Weinheim : [2008]
Subjects:
Banks and banking
Capital market
Credit
Financial crises
Table of Contents:
  • 1. Prologue : chronology of a crisis
  • 1.1. The subprime turmoil included all ingredients of a severe financial markets crisis
  • 1.2. An exemplary credit crisis
  • 1.3. The chronology of a crisis, the US subprime crisis
  • 1.3.1. What has happened so far? : prelude to the subprime turmoil
  • 1.3.2. End of 2006 : first signs
  • 1.3.3. February 2007 : microfundamentals get affected
  • 1.3.4. March 2007 : only a dip?
  • 1.3.5. April 2007 : the first default
  • 1.3.6. May 2007 : the impact on the banking sector
  • 1.3.7. June 1007 : hedge funds blow up
  • 1.3.8. July 2007 : a first peak of the crisis!
  • 1.3.9. August 2007 : the infection mechanism is getting into full swing
  • 1.3.10. September 2007 : the reaction of central banks
  • 1.3.11. October 2007 : the second subprime wave hits the market
  • 1.3.12. November 2007 : the transmission channels of the crisis are getting into full swing
  • 1.3.13. December 2007 : "hope now"
  • 1.3.14. 2008
  • 1.3.15. The subprime meltdown is a perfect paradigm for a credit crisis
  • 2. Credit instruments
  • 2.1. Bonds
  • 2.2. Loans
  • 2.3. Credit default swaps
  • 2.4. CDS indices
  • 2.5. Tranches
  • 2.6. Securitization
  • 3. Credit players
  • 3.1. Banks
  • 3.2. Fannie Mae and Freddy Mac
  • 3.3. Money market funds
  • 3.4. Central banks
  • 3.5. Hedge funds
  • 3.6. Bond insurer
  • 3.7. Private equity sponsors
  • 4. Credit strategies
  • 4.1. Leverage
  • 4.2. Leveraged super senior tranches
  • 4.3. Constant proportion debt obligations
  • 4.4. Structured investment vehicles
  • 4.5. Collateralized debt obligations
  • 4.6. Structured-squared madness
  • 5. The anatomy of a credit crisis
  • 5.1. Introduction
  • 5.2. Crisis classification
  • 5.3. A brief history of credit crises
  • 5.3.1. The sage of spillover effects and who is leading whom?
  • 5.3.2. Financial crises, some examples
  • 5.4. What can we learn from existing crises models?
  • 5.4.1. Bubble theory & credit markets
  • 5.4.2. The overshooting phenomenon
  • 5.4.3. Financial panic in credit markets
  • 5.4.4. Moral hazard in credit markets
  • 5.5. The credit cycle
  • 5.5.1. The impact of derivatives on the credit cycle
  • 5.5.2. Credit spreads and safe-haven yields
  • 5.5.3. Credit spreads and FX movements
  • 5.5.4. Excursus : decoupling of cycles
  • 6. Epilogue : how can we avoid credit crises in the future?
  • 1 Prologue: Chronology of a Crisis
  • 2. Credit Instruments
  • 3. Credit Players
  • 4. Credit Strategies
  • 5. The Anatomy of a Credit Crisis
  • 6. Epilogue: How can we avoid Credit Crises in the future?
  • 1 Prologue: Chronology of a Crisis 17
  • 1.1 The subprime turmoil included all ingredients of a severe financial markets crisis 17
  • 1.2 An exemplary credit crisis 18
  • 1.3 The chronology of a crisis - The US subprime crisis 21
  • 1.3.1 What has happened so far? Prelude to the subprime turmoil 21
  • 1.3.2 End of 2006: First signs 22
  • 1.3.3 February 2007: Microfundamentals get affected 22
  • 1.3.4 March 2007: Only a dip? 24
  • 1.3.5 April 2007: The first default 24
  • 1.3.6 May 2007: The impact on the banking sector 25
  • 1.3.7 June 2007: Hedge funds blow up 26
  • 1.3.8 July 2007: A first peak of the crisis! 28
  • 1.3.9 August 2007: The infection mechanism is getting into full swing 30
  • 1.3.10 September 2007: The reaction of central banks 35
  • 1.3.11 October 2007: The second subprime wave hits the market 40
  • 1.3.12 November 2007: The transmission channels of the crisis are getting into full swing 42
  • 1.3.13 December 2007: "Hope Now" 51
  • 1.3.14 2008 55
  • 1.3.15 The subprime meltdown is a perfect paradigm for a credit crisis 62
  • 2 Credit Instruments 65
  • 2.1 Bonds 66
  • 2.2 Loans 72
  • 2.3 Credit Default Swaps 76
  • 2.4 CDS Indices 88
  • 2.5 Tranches 92
  • 2.6 Securitization 103
  • 3 Credit Players 115
  • 3.1 Banks 115
  • 3.2 Fannie Mae and Freddy Mac 126
  • 3.3 Money Market Funds 133
  • 3.4 Central Banks 134
  • 3.5 Hedge Funds 137
  • 3.6 Bond Insurer 143
  • 3.7 Private Equity Sponsors 147
  • 4 Credit Strategies 153
  • 4.1 Leverage 156
  • 4.2 Leveraged Super Senior Tranches 158
  • 4.3 Constant Proportion Debt Obligations 167
  • 4.4 Structured Investment Vehicles 174
  • 4.5 Collateralized Debt Obligations 194
  • 4.6 Structured-Squared Madness 201
  • 5 The Anatomy of a Credit Crisis 205
  • 5.2 Crisis classification 206
  • 5.3 A brief history of credit crises 209
  • 5.3.1 The sage of spillover effects and who is leading whom? 209
  • 5.3.2 Financial crises - some examples 211
  • 5.4 What can we learn from existing crises models? 235
  • 5.4.1 Bubble theory & credit markets 235
  • 5.4.2 The overshooting phenomenon 242
  • 5.4.3 Financial panic in credit markets 245
  • 5.4.4 Moral hazard in credit markets 247
  • 5.5 The credit cycle 252
  • 5.5.1 The impact of derivatives on the credit cycle 252
  • 5.5.2 Credit spreads and safe-haven yields 255
  • 5.5.3 Credit Spreads and FX movements 257
  • 5.5.4 Excursus: Decoupling of cycles 258
  • 6 Epilogue: How can we avoid Credit Crises in the future? 265

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