China – Not Wall Street – Caused 2008 Crisis: Changing Fortunes – How China’s Boom Caused the Financial Crisis

Happen to be reading some “news” over at CNBC’s website and came across the following article…

China—Not Wall Street—Caused 2008 Crisis: Study

Thought the global financial crisis in 2008 was caused by subprime bonds, collateralized debt obligations (CDOs) and other Wall Street engineering? Think again.

According to a new study, China, not Wall Street bankers, was responsible for the global crisis and the ensuing recession (learn more).

The study from the Erasmus Research Institute of Management said the saving frenzy of the Chinese created the cheap money, which fueled the U.S. housing bubble and its collapse.

Heleen Mees, writer of the study and adjunct associate professor at the NYU Wagner Graduate School of Public Service, said that exotic mortgage products could hardly have been the cause of the U.S. housing market bubble and its ultimate collapse.

According to the study, mortgages with those special features — like mortgage-backed securities (learn more) and CDOs (learn more) — accounted for less than five percent of the total number of new mortgages from 2000 to 2006.

The article then goes on to state…

The study also argued that Ben Bernanke, chairman of the Fed, set the world up for the Great Recession by providing the “intellectual backing for the aggressive rate cuts in the early 2000s.”

So, I guess China DOES control the US, if you believe the study.

Speaking of the study, we happened to find a copy and embedded it below.

Check it out. We’re still not convinced that China was the cause of the crisis.

The dissertation below includes five academic papers that – one way or the other – all relate to China.

The first paper delivers “proof” for the central thesis of this thesis, which is that China’s boom caused the 2008 financial crisis and ensuing recession.




Changing Fortunes – How China’s Boom Caused the Financial Crisis