Teaching and research distractions have again kept me from blogging for a while. I guess my defense is that learning the facts is always an important precursor to writing about them. This morning, however, I decided to divert from class preparation to add my praise for what is surely destined to be the BOOK OF…
In yesterday’s New York Times, Joe Nocera incisively attacked the persistent falsehood that Fannie Mae and Freddie Mac were “ground zero” for the financial crisis. In “An Inconvenient Truth,” Nocera correctly observed that: “The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.” In an…
Possibly my two favorite things are 80s music and Goldman Sachs-related grandiosity. So, a combo is a special treat. We have them together with the BBC-broadcasted-boastings of independent trader Alessio Rastani. Rastani proudly proclaimed today, “This is not a time right now for wishful thinking that governments are going to sort things out . .…
I tell my class that a crisis can spring from the most unexpected sources. You never see the lightning that strikes you. Now we focus on some of the most obvious risks, such as a sovereign debt default. As Howard Schneider reported in the Washington Post yesterday, “European banks are facing a reckoning over hundreds…
A few days after he made the fateful acquisition of Golden West, Ken Thompson, then CEO of Wachovia Corporation exuberantly celebrated the universal bank model that had emerged in the United States in the wake of the repeal of the 1933 Glass-Steagall Act: [T]here is great value in the universal bank model for both customers…
As I feast on financial crisis books, thought I’d share this tasty bit from Dean Baker’s False Profits: Recovering from the Bubble Economy. On page 9, Baker writes: “Progressives do the conservatives’ bidding when we denounce them as ‘market fundamentalists.’ We should, instead, be exposing their use of government to set up structures that ensure…
This post is the last installment in a three-part series harvesting the recent Financial Crisis Inquiry Report (FCIC Report) to debunk the top-ten urban myths about the Financial Crisis. To read about myths 1 – 5, click here. Myth 6: The Financial Crisis was caused by too much government regulation. Reality 6: No. Deregulation and…
Last week, I began musing here, about mining the Financial Crisis Inquiry Report to confront the top ten urban myths about the Financial Crisis. Expecting to dash off a blog series in a day or so, I found that my eyes were bigger than my brain capacity. Though I had read a good portion of…
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