What Was the Job of the Banks in 2009?

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 […]

Pete Davis: Treasury Secretary Hank Paulson initially sold Congress in the fall of 2008 on emergency intervention to purchase “toxic assets,” but quickly reversed course in favor of direct capital injections. Those favored financial institutions revived more quickly than most thought possible and most of those injections have already been paid back. However, most of […]

UPDATE: CR appears to agree with me, even as he raises another point: Bernanke used data from other countries to suggest monetary policy was not a huge contributor to the bubble … however, Bernanke didn’t discuss if non-traditional mortgage products contributed to housing bubbles in other countries. This would seem like a key missing part […]

Tyler Cowen can count: In sum, maybe three percent expected inflation conflicts with the desire to rapidly recapitalize banks through maintaining a wide interest rate spread. Maybe we need that zero nominal short rate or at least the Fed thinks we do…. I also regard this as a somewhat gruesome hypothesis. It means that “Main […]

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 […]

Geithner’s Baa Humbug to Job’s and Labor (h/t Run75441) “Ebenezer: Since you ask me what I wish sir, that is my answer. I help to support the establishments I have named; those who are badly off must go there.” Daniel Gross at Slate interviews Tim Geithner here: “We Will Be Judged on How We Dealt […]

Good Thing We Have Deficit Hawks in Congress: The tenants were all living low-rent under a program that’s beginning to expire – but had been promised they could still qualify for a federal Section 8 rent subsidy. But this week, when many of them began to show up at New York City Housing Authority offices, […]

But Steve Randy Waldman already did the heavy lifting: several of the other officers had been stationed at the height of the housing bubble at facilities located near D.C. in Northern Virginia. They lived in very modest homes which were removed from their workplaces by substantial driving distances, but these homes were nevertheless particularly pricey […]

Down here it’s just winners and losersAnd don’t get caught on the wrong side of that line This will be a long post. Even with all the pictures above the fold. It started with a finger exercise during my daughter’s swim team practice: Just in case you thought I was picking on The Big C […]