a new report from the National Bureau of Economic Research, the Great Recession wasn’t the result of a bursting housing bubble at all but rather a bank panic in the long tradition of American bank panics. Yes, subprime mortgage securitization was a mess -- a house of cards probably doomed to fall -- but subprime by itself simply wasn’t big enough to put the entire financial system at risk. That required a failure of the Renew Sale and Repurchase (REPO) market for collateralized securities that over the last 30 years had quietly come to backstop global finance.
Read the report. It is fascinating and chilling.