“Anatomy Of A Train Wreck”
A Frontburnervian whose business prowness I respect forwarded this analysis of the economic crisis by UTDallas Professor Stan Liebowitz, published by the Independent Institute, noting that it is
“the absolute best thing I have read about the mortgage meltdown.”
12 Comments to ““Anatomy Of A Train Wreck””
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Personally I prefer WFAA’s explanation of the Federal Reserve system. Apparently it involves gardeners in suits and a hose or something.
http://www.wfaa.com/sharedcontent/dws/wfaa/latestnews/stories/wfaa081210_mo_fedreserve.4f3f4b9f.html?ocp=2#slcgm_comments_anchor
“Prowness” — ????
Well, if the guy has a lot of Prow, why not?
This is a good example of why the Federal Reserve needs to be independent of political influences.
I’d look at how Richard F. Syron, former head of Freddie Mac, was appointed president of the Boston Fed and put in the position of directing research towards presenting evidence that now seems not so independent.
He does business lying down?
Just reading the headline, I thought this was a follow up on Tim’s Frontburner For Your Ears post earlier.
Damn you Josh.
Will read now, but it will be tough to top this one by Michael Lewis:
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom
Seems like a rehash, along the lines of “the whole economic crisis happened because Clinton wanted minorities in houses they couldn’t afford”, ignoring a lot of the other reasons.
I think I know this Prowness fellow. He needs to be spending more time at his day job, which does not involve mortgages.
@mm – exactly what are the “lot of other reasons” that the professor ignored? Did you even read it? If so, show me where his empirical data is incorrect, or statistical analysis misses the mark. It’s a fine article and I agree with Wick.
@wja4507 – Yes, I read the article. His empirical data seems fine, and statistical analysis is top notch.
And “ignored” might be too strong a word, but the role of the speculators was definitely downplayed. The people who bought houses they couldn’t afford got their scolding, as did the federal agencies that enabled it. But the speculators who were just as big a part of the problem seemed to get off light, in my reading.
In fact, the author himself confirms this: “This report concludes that, in an attempt to increase home ownership, particularly by minorities and the less affl uent, virtually every branch of the government undertook an attack on underwriting standards starting in the early 1990s.”
Seems analagous to saying that banks deserve to get robbed, if nobody is there to stop the criminals.