Saturday, July 10, 2010

Housing/financial bubble/scandal:

TNR has a crisp review of what happened. It's bullet points are:
  • First, there was a stand-down of the financial police. [aka "desupervision"]

  • Second, the response to desupervision was a criminal takeover of the home mortgage industry.

  • Third, the counterfeit mortgages were laundered so they would look to investors like the real thing. This was the role of the ratings agencies.

  • Fourth, the laundered goods were taken to market.
Bush and Obama administrations are critiqued by the author, James K. Galbraith.

Of interest, Galbraith calls the deficit hawks a different name: Deficit Hysterics. I wonder if that will catch on.

It's a good read.


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