"As long as the music is playing, you've got to get up and dance. We're still dancing."
Those were the now-infamous words from Chuck Prince, then the CEO of Citigroup, on July 8, 2007, the eve of the credit crisis that eventually led to the worst recession since the Great Depression.
For Alan Blinder, former vice chair of the Federal Reserve Board and a professor at Princeton University, Chuck Prince's quote succinctly explains the problems with the financial and housing markets that led to economic collapse just a few years ago. Blinder explores the Great Recession and its aftermath in his new book, "After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead."
Blinder says: "When the lending world…looks safe because recent performance have been so good…people forget the past. They forget that loans sometimes go bad."
Another issue that led to the collapse, Blinder says, was lack of information and transparency: "You had treasurers in hamlets in Norway, and Italian pension funds, and things like that, buying these securities without really knowing what they were buying."