Sub-prime mortgage lending : a cultural economy.

Abstract

Developing cultural economists’ concerns with the assembly of agency in financial markets, agency in sub-prime mortgage lending in the United States is shown to have been made up through calculative devices of risk. Credit reporting and scoring provided for the targeting, sorting, pricing and governing of customers in terms of risk. The securitization of mortgages into risk-structured financial instruments made possible extended lending. Interest-only adjustable rate mortgage products called up mortgagors who, as leveraged investors, embraced risk in a rising property market. The current sub-prime mortgage crisis is understood in critical terms as a moment when the contradictions of these risk devices and their incapacity to capture the uncertain future have come to the surface, and agency in sub-prime lending has been disassembled. Cultural economy is thus shown to make a distinctive contribution to the politicization of sub-prime that stresses the ambiguous politics of calculation.