Robert Waldmann Barry Ritholtz argues that the problem with mortgages was underwriting standards and not securitization. He appeals to the very great authority of Monty Python. Click the link. Ritholtz seems not to be familiar with this new idea in economic theory called “Nash equilibrium”. Over -rated yes. Totally irrelevant not so much. One can […]

UPDATE: In this context, Dr. Black catches Jamie Dimon expressing what is at best ignorance: However, [Dimon] cautioned, until the market meltdown “you never saw losses in these products, because home prices were going up.” All that research in 1984 and 1990 was for naught, apparently. I’m still away (things are better, but still not […]

The WSJ collects reactions to the release of the latest Case-Shiller index. Let’s look at two, just for fun: One in four mortgages are currently underwater. Foreclosure and delinquency rates, which hit a record high at the end of the third quarter of 2009, are therefore likely to continue to rise, perhaps sharply. In addition […]

Via Greg Mitchell’s Twitter feed, lying isn’t just for the IB branch any more: Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman’s then-Chief Executive Henry Paulson — later U.S. Treasury secretary — in 2003. Unable to identify a […]

Credit crunch, followed by asset deflation. See also Robert’s series of essays in December/January.

Susan of Texas has an immortal post on the housing crisis, McMegan’s ratiocination, and the persistence of ignorant memes. The money quote: McArdle doesn’t refute facts, she hen-pecks at the methods used to gather information. That way she doesn’t actually have to prove anything, she just casts enough aspersions on the data to confuse the […]

Did no one in Georgia pay attention in the 1980s? It’s not just reputations that are on the line. Board members, also known as directors, could be held personally liable for a bank’s demise. Experts are expecting a wave of lawsuits against directors to be filed in Georgia over the next year or two as […]

Ken Houghton’s Loyal Reader directed my attention to this WSJ blog entry, commenting on, and attempting to provide cover for, the management and actions of The Old Firm. I’m sympathetic to the general argument—Ace Greenberg’s naming of Jimmy Cayne to succeed him was incredibly bad judgment that had real consequences, but not malice aforethought—but the […]

All (somewhat***) via Mark Thoma: Thomas Frank in the WSJ tells me why I always disagree with Robert (and the Other Economists) on the role of rating agencies: And who makes sure that Moody’s and its competitors downgrade what deserves to be downgraded? In 1999 the obvious answer would have been: the market, with its […]

Atrios writes: I know we’re in crazy economic times here, but it’s still a bit weird seeing economists suggesting that our government get into the mortgage business at below market rates. I say the economic times are so crazy that I’ll worry about getting a refi at “below market” rates when the market shows some […]