摘要：

The subprime mortgage crisis of 2007-2008 is chosen as a case study against which the model of self-referential finance can be tested.. The crisis had its origin in a real-estate bubble that was fed in its turn by a credit bubble. In examining the mechanisms of euphoria—the phenomenon of securitization, the encouragement offered by economists, the underestimation of credit risk, and the difficulty of establishing the existence of a bubble in either case—it becomes clear that the perilous accumulation of risk was a consequence mainly of the procyclical effects of largely deregulated markets. The high degree of leverage in the financial system as a whole suggests the analogy of a compressed spring: once the rise in home prices came to an end, when the compression had reached a maximum, the abandonment of the prevailing valuation convention made an explosive reaction inevitable.

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