CHAPTER 2The Largest Credit Market in the World

AMILLION DOLLARS IS A LOT OF MONEY. ELEVEN TRILLION DOLlars is an unfathomable amount of money. By way of comparison, a million seconds is about a week and a half; eleven trillion seconds is almost 350,000 years.

Just before it collapsed in 2008, the U.S. home mortgage market exceeded $11 trillion in size. It was the largest credit market anywhere. The dollar value of outstanding U.S. home mortgages was 20 percent greater than the country’s national debt.

The crisis that almost brought down the global financial system had its origins in a no-holds-barred political fight among giant financial companies and their regulators over who would have the dominant position in this market—and the profits that ...

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