Senseless Panic : How Washington Failed America

by William M. Isaac; With: Philip C. Meyer; Foreword by: Paul A. Volcker

• ISBN13: 9780470649275
• ISBN10: 0470649275
• Format: eBook
• Copyright: 2010-05-01
• Publisher: Wiley

Summary

The 1980s opened with the prime interest rate at an astonishing 21.5 percent, leading to a severe recession with unemployment reaching nearly 11 percent. Depression-like conditions befell the agricultural sector, a bubble burst in the energy sector, a rolling real estate recession swept the country, the entire thrift industry was badly insolvent and the major money center banks were loaded with third world debt. Some 3,000 bank and thrifts failed, including nine of Texas' 10 largest, and Continental Illinois, which, at the time, was the 7 th largest bank in the nation. These severe conditions were not only handled without creating a panic, the economy actually embarked on the longest peacetime expansion in history.In Senseless Panic: How Washington Failed America, William M. Isaac, Chairman of the Federal Deposit Insurance Corporation (FDIC) during the banking and S&L crises of the 1980s, details what was different about 2008's meltdown that allowed the failure of a comparative handful of institutions to nearly shut down the world's financial system. The book also tells the rousing story of Isaac's time at the FDIC. With accessible and engaging prose, Isaac: Details the mistakes that led to the panic of 2008 and 2009 Demystifies the conditions America faced in 2008, and Provides a roadmap for avoiding similar shutdowns and panics in the futureSenseless Panicis a provocative, quick-paced, and thoughtful analysis of what went wrong with the nation's banking system and a blunt indictment of United States policy.

Table of Contents

Foreword

Acknowledgments

Introduction

No Calm Before the Storm

Home Alone

The Early Years (1978 -1981)

The Savings Bank and S&L Crises

Penn Square Fails

The Butcher Empire Collapses

Deposit Insurance Reform/Tackling Wall Street

Continental Illinois Topples

Preparing to Leave

Lessons Learned

Here We Go Again

Policy Mistakes-1989 through 2007

The Subprime Mortgage Problem

SEC and FASB Blunders

Schizophrenic Failure Resolution

The $700 Billion Bailout

Never Again

Afterword

Authors' Notes on Sources

About the Authors

Index

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