This chapter brings us to the heart of finance: the Wall Street investment banks. It discusses the structured securities through which they parcelled up and re-sold the loan repayment commitments of mostly poorer residential property buyers in the United States, leading to the crash of 2007–2009 and the global financial crisis that followed. The objective is not to create new interpretations of the crisis itself, but rather to show the implications for the larger argument of the book. The chapter asks how these new financial products were developed, how they were fitted to the existing institutional and discursive environment, and what work was done to manipulate that environment to fit them. It also asks how these products were constructed as having value, and how financial actors were brought into the asset circles for them, stressing the central role played by the ratings agencies in constructing asset sets: groups of assets that investors come to think of as equivalent to each other, so that investors who are part of the asset circle for existing assets in the set are smoothly inducted into the asset circle for further assets simply by inserting these new assets into the set.

Chapter 10 examines the housing bubble which occurred in Ireland, Spain, the UK and the United States in the 2000s. House prices in many parts of these countries more than doubled in the years leading up to 2007. They then crashed with terrible consequences for the global financial system, which imploded in September 2008 when Lehman Brothers entered bankruptcy. The chapter then discusses how the bubble triangle explains this episode. Financial alchemy meant that mortgage finance could be provided to a wider range of people, thus making the family home much more marketable and an object of speculation. The spark which ignited the subprime bubble was a policy decision taken in the late 1990s that attempted to use loose mortgage lending standards as a substitute for government-provided social housing. The chapter concludes by examining the economic, social and political consequences of the bubble. The housing bubble of the 2000s is a perfect example of an economically and socially destructive bubble, despite extraordinary measures taken by governments and central bankers to save the system. The chapter concludes by drawing a line from the housing bubble and its collapse to the rise of populism.