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Primed to explode

Was it greed or ignorance that fuelled the sub-prime crisis? David Miles looks at two new books divided both on this question, and on what to do about it

By David Miles   October 2008

The Subprime Solution by Robert J Shiller (Princeton, £9.95) Confessions of a Subprime Lender: An Insider’s Tale of Greed, Fraud, and Ignorance by Richard Bitner (John Wiley, £10.99)

When people who work for financial institutions, and who are paid (a lot) to understand markets, became aware of emerging problems in sub-prime mortgage lending in the US, the majority felt that it might have some impact but its overall significance was limited. Sub-prime lending is the advance of money to fund home purchases to people with a track record of struggling (and generally failing) to pay off debt. It was substantial,…

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