I cannot help but be struck by one thing in this reform bill:

If it were law since the year 2000, the only part of it that might have prevented, or at least slowed down the crisis, was the new minimum underwriting standards for mortgages. No more “No Doc, NINJA, or Liar loans.”  That Lenders must verify income, credit history and job status certainly would have prevented the worst vintages of sub-prime and exotic mortgages from ever being written, or subsequently securitized.

Other than that, there is not a single element of the reform that would have prevented the last crisis. I strongly doubt that anything else in this reform package is going to prevent the next one, either.

Category: Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

38 Responses to “Stop the Next Crisis? This wouldn’t have stopped the last one . . .”

  1. KidDynamite says:

    was this reform package ever supposed to address too big to fail? I thought TBTF was the main point… but remains almost entirely unaddressed.

  2. cswake says:

    According to Bair, the FDIC now has the power to end TBTF:
    http://online.wsj.com/article/SB10001424052748703615104575328513929369040.html

  3. [...] reform bill is that it wouldn't have even prevented the last crisis, let alone the next one.  (TBP) and [...]

  4. mathman says:

    i heard the same thing as explained by Barney Frank on a tv interview i happened to catch, cswake.
    i think it’s all over anyway and that the details will slowly emerge making it all clear that this is indeed what we get for our actions and lack of responsibility. Not only that, i think it’s too late to do much to lessen how bad a lesson we get since we have no conception of the latent effects of our actions on the biosphere and continue to poison the fishbowl every day without cease (until we can’t, apparently).

    Continue to fight the good fight to the end; those that survive may appreciate it.

  5. doug says:

    Yeah, it was those lying shiftless borrowers that was the entire trigger. Whew, I am glad thats over…

  6. Doug:

    There have been lending standards since the beginning of commercial credit. It is incumbent upon the LENDERS — it is their (or their investor’s) monies after all — to verify credit worthiness.

    Indeed, the history of lending looks something like this:

    1 million BC ——————————————————| 2002-02 | ——->

    Where most of that timeline reflected the borrowers ability to service the debt. That 5 year ’02-07 exception was when lending standards changed from the borrowers ability to service the debt tot he lenders ability to sell the debt to Wall St. securitizers.

    I don’t blame the borrowers — unworthy borrowers have existed as long as credit has. I blame the banks/mortgage writers who abdicated prudent lending standards . . .

  7. ruetheday says:

    We need to bring back an updated Glass-Steagall, one that recognizes the shadow banking system as an equally risky and largely unregulated alternative to the commercial banking system, and brings it under the regulatory umbrella as such.

  8. Greg0658 says:

    my favorite radio station is running these ads .. “if you have $10K in credit card debt and/or $15k in taxes due the IRS – Call Us – we can get your debt reduced 50 to 80%” .. makes a businessman think twice about what makes the world go round and/or wish I could afford to offer deals on my favorite station

  9. V says:

    I’m surprised Moody’s has the cheek to provide an opinion on the reform bill.

    http://www.reuters.com/article/idUSTRE65O4PR20100625

  10. Owen Money says:

    There’s no reform, just more business as usual. Is there anything in those 2000 pages reforming the FCIC? Three more banks failed this week, and one of them, Englewood, Florida-based Peninsula Bank, was taken over by Bond Street Holdings, LLC. That’s a corporation with a pretty innocuous and generic name, right? Well, it is until one digs below the surface.

    Although it has NEVER been reported by the press, things are turning out like many of us tin foil conspiracy nuts figured they would turn out; the big failed banks, using money forced out of the taxpayers’ hands, are buying up all the other banks. Yes, the bankster controlled USG has moved beyond corporatism, and has evolved into full-blown fascism.

    Is there an international banking conspiracy?

    Is the FCIC turning over failed banks (while forcing the taxpayers to insure their bad debts) to the same group of Wall Street crooks and international banks who brought down the American economy?

    Well, here is what I have pieced together. You can draw your own conclusions:

    Bond Street Holdings LLC now owns three formerly failed US banks in Florida. It has acquired Peninsula Bank (six branches)., Premier American Bank (4 branches) and Florida Community Bank , one of florida’s oldest banks (11 branches).

    Bond Street Holdings LLC is a blind pool that was funded by Deutsche Bank AG (branches in Europe, the Middle East, Africa, Asia Pacific, South Amrerica and North America) to the tune of $370 million.

    The two guys really running Bond Street Holdings LLC are: Les Lieberman, who used to work for Drexel Burnham Lambert, the world’s most famous junk bond firm, that featured super crooks, Ivan Boesky and Michael Milken (Drexel was forced into bankruptcy after Giuliani threatened it with a RICO indictment), and Vincent Tese, the
    former New York state superintendant of banks (a fine example of regulatory capture), and a member of Bear Stearns Cos.’ board of directors from 1994 until the firm’s fire sale in 2008 to Jamie Dimon (JPM).

    The Cosa Nostra was a Boy Scout troop compared to this banking cartel. This is the first of these bank takeovers I’ve actually looked into. It’s not hard to imagine that a real investigative journalist, if there are any left, could uncover a major pattern of large, crooked predatory bank takeovers. It’s hard to believe this whole thing, including the bank collapses, wasn’t well-planned long ago. Just because one wears a tin foil hat, doesn’t necessarily mean that hat is pulled over one’s eyes.

  11. Mike in Nola says:

    As I’ve said before, real reform won’t happen til the next crisis when there won’t be enough votes to pass another TARP and helicopter Ben and whoever is the Treasury Secretary cannot paper over the problem and pretend it’s fixed. The magnitude of the problem will be apparent to everyone and Congress will be forced to confront the issue or face pitchforks.

    There may even be a move to rein in the power of the Fed as it will likely purchage another few trillon in crap so the banksters can have their bonuses.

  12. doug says:

    BR, it was a weak attempt at snark…sorry and thanks for the gentle reply…

  13. engineerd1 says:

    Hmmm. I thought liberals invented the idea that you couldn’t legislate morality? Guess that only applies to the stuff you wanna do. Life is crisis. Life is markets. Government is death.

  14. ACS says:

    “Other than that, there is not a single element of the reform that would have prevented the last crisis. I strongly doubt that anything else in this reform package is going to prevent the next one, either.”

    Sounds like a pretty good return on campaign contributions.

  15. Marcus Aurelius says:

    engineerd1:

    You have taken the propaganda hook, line and sinker.

    Life is crisis? That’s a media meme. Life is markets? That, too. Government is death? That one jumps the shark.

    If you were on your own, you’d be dead. Humans are social animals. Humans created government because it is enhances life — providing community, security, and the power of restraining individual impulses for the benefit of the group (I guess you’d prefer to go mano a mano with some of the violent folks we have in our prison system than to ever be subject to an “evil” such as government).

    Corporate media is the propaganda arm of the New Corporate Order. “The media” have been complicit at every stage of selling liberalization of corporate power as rationally conservative policy by means of a constant blaring of vague and non-existent threats (“moral” issues such as gay marriage, they’re going to take our guns, the government is evil, muslims will subvert our culture, and the blatantly false assertion that we have a Judeo-Christian Constitution, are all examples of this propaganda).

    That government cannot legislate morality is not an idea, it’s an observation of reality.
    _______________

    Tangentially related: here’s a truly effective rebuttal to the nonsense spewed by the right-wing propaganda machine:

    http://news.yahoo.com/s/ap/20100624/ap_on_en_tv/us_immigration_take_our_jobs

    I’ll bet not one single right-wing, addle-brained pussy steps up to the challenge.

  16. Marcus Aurelius says:

    engineerd1:

    You have swallowed the propaganda hook, line and sinker.

    Life is crisis? That’s a media meme. Life is markets? That, too. Government is death? That one jumps the shark.

    If you were on your own, you’d be dead. Humans are social animals. Humans created government because it is enhances life — providing community, security, and the power of restraining individual impulses for the benefit of the group (I guess you’d prefer to go mano a mano with some of the violent folks we have in our prison system than to ever be subject to an “evil” such as government).

    Corporate media is the propaganda arm of the New Corporate Order. “The media” have been complicit at every stage of selling liberalization of corporate power as rationally conservative policy by means of a constant blaring of vague and non-existent threats (“moral” issues such as gay marriage, they’re going to take our guns, the government is evil, muslims will subvert our culture, and the blatantly false assertion that we have a Judeo-Christian Constitution, are all examples of this propaganda).

    That government cannot legislate morality is not an idea, it’s an observation of reality.
    _______________

    Tangentially related: here’s a truly effective rebuttal to the nonsense spewed by the right-wing propaganda machine:

    http://news.yahoo.com/s/ap/20100624/ap_on_en_tv/us_immigration_take_our_jobs

    I’ll bet not one single right-wing, addle-brained pu$$y steps up to the challenge.

  17. TakBak04 says:

    @Owen Money Says:
    June 26th, 2010 at 9:06 am

    There’s no reform, just more business as usual. Is there anything in those 2000 pages reforming the FCIC? Three more banks failed this week, and one of them, Englewood, Florida-based Peninsula Bank, was taken over by Bond Street Holdings, LLC. That’s a corporation with a pretty innocuous and generic name, right? Well, it is until one digs below the surface.

    —–

    That digging you did is fascinating. I’ve been wondering who is checking out the buyers of these banks and why they would want to invest in these “troubled assets,” unless they were getting some help from the Fed. Any consortium with an “LLC” after it should seem to be raising a red flag. Why would they want to invest in failing banks? How do they intend to make money from this?

    Sadly, with the demise of Print Media and money for reporters with all the M&A frenzy in the new business sucking up the money that would have gone to hiring staff we aren’t getting much in the way of investigative reporting. Some indie little newsgroups try….but they don’t have the money to do major investigating when there are so many crooks and so little resources.

  18. Andy T says:

    Barry,

    There is NOTHING that can prevent the ebb and flow of the greed vs. fear cycles. NOTHING can prevent bubbles or manias. They have happened since the dawn of money and trade. NOTHING can prevent the real estate cycle from playing out as it has for centuries.

    It is what is–nothing ever changes.

    Which is fantastic. It’s where the opportunities for success and failure come from. The periodic booms and busts are the characteristics of a capitalistic system, one capable of generating plenty of wealth and progress, but one that also wrings out the excesses every once in awhile.

    Every single bit of new regulations we’re imposing with all the new super-duper regulators will always fail to stop the next boom and bust cycle, because greed will find a way to overcome it. And, thankfully so…..

    All we’re doing now is wasting time and heaping new costs on the system, costs that will ultimately be born by the public.

    We’re wasting our time with this stuff and everything we’ve done the last few years. We should have just let the banking system collapse. A full cleansing is what was required, and we didn’t get it. And, we ain’t going to get it with anything contrived or manufactured by “government.”

  19. Marcus Aurelius — best comment of the week !

  20. Marcus Aurelius says:

    Thanks, BR. I’m flattered.

  21. jpmist says:

    The real story here is the failure of our political system. The proper solution simply could not be achieved, thanks to the pushback from our oligarchs and the callowness of our legislators.

    Think about that for a minute; the proper solution simply could not be achieved. Hell of a thing isn’t it?

  22. Patrick Neid says:

    Like the Health Care bill, as Chris Dodd stated, we have to pass this bill to find out what’s in it. That says it all.

    “Corporate media is the propaganda arm of the New Corporate Order. “The media” have been complicit at every stage of selling liberalization of corporate power as rationally conservative policy by means of a constant blaring of vague and non-existent threats (“moral” issues such as gay marriage, they’re going to take our guns, the government is evil, muslims will subvert our culture, and the blatantly false assertion that we have a Judeo-Christian Constitution, are all examples of this propaganda).”

    Too funny.

  23. Romberry says:

    What I keep hearing is that we should celebrate wildly…’cause the bill is better then nothing. Whoopee! (There, I celebrated.)

    The stricter underwriting (read “return to actual minimum standards of underwriting”) on mortgages is indeed a good thing. But as the problem was not in fact subprime (NINJA, liar, no-doc) loans — even though the issues with those loans not performing was the canary that told us the mine was full of gas and was about to go boom — I don’t see how this undeniably good thing really means a lot in terms of actual reform and prevention of further meltdowns.

    The problems from my perspective were:

    * gambling (by which I mean the book being made on bets like naked credit default swaps — which is what killed AIG and sent a massive shock wave through the system)

    * the ratings agencies (with their conflict of interest in needing new business from the very companies whose instruments they were being paid to rate)

    * the whole issue of securitization (where you mix a barrel full of junk together and pour gold out the other side…so long as everything always and only goes up)

    * And lastly, too big to fail (which effectively means that government has a gun to its head and taxpayers are soaked to pay the ransom for release.)

    The obscenity of paying off gambling debts (naked CDS contracts) at par still chaps my arse. Naked CDS contracts are not insurance and about the only thing I might agree that these craps players should have gotten back was their original bet…and maybe not even that.

    Anyway…better than nothing. With what passes for government in these United States these days…Whoopee!

  24. Andy T says:

    Rorschach question for Marcus Aurelius:

    Does the US Constitution/Bill of Rights bestow onto American citizens their right to freedom and liberty?

  25. Romberry says:

    Andy T, I’m not Marcus, but mostly what the Constitution of the United States bestows onto American citizens is limited government and the (then radical) idea that the powers of government only arise from the consent of the governed.

    The rights to freedom and liberty are inherent. They do not arise from or are in any way “granted” by the Constitution. These rights exist for all people in all nations…even if the governments of those nations trample on or otherwise abridge those inherent (by right of birth/being alive as a human) rights.

  26. Andy T says:

    “Humans created government because it is enhances life — providing community, security, and the power of restraining individual impulses for the benefit of the group.”

    Government does not enhance life and government does not provide “community.” People do those things–”governments” do NOT.

  27. Rescission says:

    @Marcus Aurelius:

    The “Media” enhances the liberalization of corporate power. Agreed. But doesn’t government regulation do the same thing by squeezing our more competition?
    More regulation makes things more and more complicated, benefitting corporatists uniquely and killing small business and entrepreneurs. Massive bureaucracies raise the barrier to entry so high that start ups are discouraged.

    The problem is the cozy relationship between Industrialists (corporate oligarchy) and the politicians who rely on their monetary gifts for re-election and power. Less regulation increases competition, takes power out of the “central planners” hands and exposes the corporatists to new competition.

    Economic freedom and the pursuit of individual interests seem to the virtues worth pursuing. While you may not think we have a Judeo-Christian constitution, wouldn’t you agree that we DO have a constitution that was designed as a document to “limit” the powers of the central government? Specifically written to tell us what the government shall not do, rather than what it should do? I can’t see that the constitution was designed to “restrain individual impulses for the benefit of the group” but rather to “restrain the government to enhance individual pursuits”. When collectivists place power in centralized planning, they must take power away from individuals.

    Lastly, why do we have to choose between having criminals on the streets or being subjected to government control? Do these have to be at odds with each other?

  28. GrafSchweik says:

    Marcus A:

    Your comments on the underlying issues are invariably among the best, if not the best, and have been in the nearly 3 years I’ve been following this blog. I may be too busy to do more than mostly lurk but next to Barry’s posts, your comments are ones I always keep an eye peeled for because you almost always articulate what I’m thinking far more succinctly than I ever could.

    I used to wonder about the eroding sense for and awareness of history that was already discernible when I was in high school in a Boston suburb in the late 60s; how it might impact our nation and its institutions and how quickly. Because that is what has led us to where we are today.

    At some point between the Clinton impeachment and the repeal of Glass-Seagal I stopped wondering. Since then it’s been a question of how far we’d fall, how quickly and whose model we’d follow.

    We have our high cholesterol, red, white and blue, bible thumpers following Mao’s ‘cultural’ revolution model, but they can only really control certain states and it’s hard to imagine them taking national power.

    Then there are the out and out zombie fascists following the German model, their grey cells embalmed in Manifest Destiny, thrilling to the military imperatives of empire and backed by nativist plutocrats who believe fervently in the Divine Right of Money. They have quite a following too and they’ve got a pretty firm control of the military and chunks of the media. But although they have potentially more reach, they are not that close to power. That does not stop them from making common cause with either the Christian maoists and the third group which you so elegantly described this morning, the New Corporate Order.

    The fascinating and hilariously ironic thing about the NCO is that—I wonder if anyone else has ever thought of this—they are the inverse of the Soviet Marxists. Instead of dialectical materialism, we get dialectical corporatism. Despite being the youngest of our three great alliances of mass psychosis, they are the most brutal and effective.

    Secret police? A waste of time and money! Credit bureaus and shipping manufacturing jobs to corrupt or totalitarian foreign countries is far more efficient and improves the bottom line by making sure that fewer souls can get their greasy mitts on any part of it. With a skill that would make a Stalin pop his woody before he could find his zipper they have a majority of the Sheeple serfs believing in the Divine Right of Corporations.

    With equal parts Huxley and Orwell, and long term planning—such as the Federalist Society that has given us Chief Justice Roberts—that would make Lenin envious, over the past 40 years they have taken over much of the 3 branches of government and nearly all of the Fourth Estate. I have no doubt that Breznev and friends are sitting on the other side, slapping their heads Homer Simpson style “Doh!” and clamoring for a next incarnation somewhere in our moneyed elite

    I could go on but why bother? Anyone with a half way decent education and a willingness to think instead of parroting memes and talking points already knows this.

    In 1988 the Soviet foreign minister Schevardnadze gave an interview to the German news weekly ‘Die Zeit’: after a long discussion of why the Soviets no longer wanted to be enemies of the West, he said “We will take your enemy away from you. What will you do then?”

    Now we know.

  29. Marcus Aurelius says:

    Andy T:

    The Constitution establishes a government and immediately limits its power. The Bill of Rights grants nothing to anyone (it does however assume many things). The Bill of Rights is a document of prohibition against government.

    As for your second question, humans formed government (even at the tribal level, and even in the most rudimentary societies), for exactly the reasons I stated (you’ll notice, in history, that invaded people seldom turned to their invaders to free them from the oppression of their own government). In many cases (in fact, in almost every case), these governments eventually became despotic (and as we are now witnessing, having foolishly let our government exceed its Constitutional powers). Our Constitution sought to balance the necessity of government with the almost universal tendency for governmental power to become excessive (this progression is the basis for the book, Lord of the Flies, which presents the transition from government by consent to government by fear).

    If I remember correctly, Jefferson did some writing on government and it’s purposes and flaws, prior to writing the Declaration of Independence.

    When someone states that government is evil, their motives should be questioned. Over the past 30 years, or so, those vilifying government are those who would assert despotic power over the governed. For example, right-wing folks — at least those pushing the right-wing meme of “evil government” — want to regulate who can have sex with whom, they see nothing wrong with religious tests as a condition of electability, they disdain personal welfare while championing corporate welfare, while openly seeking to limit the freedoms and rights of an increasingly large group of people who exist on the ever smaller ‘fringe’ of society (thereby concentrating power in the middle, where they reside). Those put upon by these proponents of small or no government include gays, eccentric or “foreign” religious groups, the highly pigmented, labor unions, unwed mothers, and the catch-all and most vile of all, “Liberals.” The electorate, so far, has been stupid enough to allow this, even going as far as taking a pay cut while those benefitting from this agenda prosper beyond all reason. Let’s not forget the Military/Industrial complex, abandonment of habeas corpus (pre-dating the Constitution by a long time), tazing of people speaking their minds in public forums, cameras on telephone poles, illegal wiretaps on the citizenry, and graft — these are hallmarks of the folks who would have more limited government.

    Contrast that with advances and expansions of personal freedoms we experienced under more liberal governments from 1900 to 1970, or so (when we began abandoning the Constitution) — voting rights, universal education, child labor laws, the minimum wage, and the greatest expansion of individual wealth for the greatest number of people in the history of the world, and you can clearly see the benefit of government limited by our Constitution.

  30. Marcus Aurelius says:

    Thanks, GrafSchweik! I’m going to go tell my SO that I’m a bad ass on TBP today (and that it will cost her dearly).

    I agree with your comment wholeheartedly. Huxley + Orwell nightmares = Roberts. Yes, we have credit bureaus to keep tabs on us, but we ALSO have secret police.

  31. Andy T says:

    MA:

    Agree with your first parts at 4.37. Then, you sort of lost with me with the whole diatribe linking those who call for minimal government with the people who want the Military/Industrial complex, etc, etc….It’s a bit nonsensical.

    Both of our main political parties have abandoned their roots long, long ago, so there is no argument here about the inanity of the “right wingers” as well as the “left wingers.” There all wing nuts.

    Those of us who really want limited government really DO want more limited government in all respects.

    i.e.

    a) Remove ourselves from our role of World Police and dramatically reduce the Military/Industrial complex.
    c) Dismantle the Departments of Homeland Security, Energy, Education as a starting point. Disperse the rest of the government agencies around the country to at least get the government fat away from Washington D.C. (the only area not experiencing real economic difficulty.)
    d) Take the billions of pages in the Code Federal Regulations and reduce it by at least 50% as a starting point.
    e) Legalize drugs and forget about the “war on drugs.” Leave it up to the states and localities to decide what they want to do.
    f) Go to a flatter tax system with few deductions for anything (including the mortgage interest). Explain to the thousands of people in tax accounting/law professions that they’ll need to retrain themselves in other areas.

    The military spending, the prisoner population (via our “War on Drugs), the accountants, and the lawyers all represent barnacles on the American ship. We need to start chipping that drag off the hull.

  32. TakBak04 says:

    Andy T and Marcus…….

    There is so little in “lines of difference” between you to it would seem there could be some agreement somewhere there that certainly isn’t what Sarah Palin and the Tea Partiers are about.

    Why can’t we GET TOGETHER and HASH this stuff out?

    Fine Lines of Difference…seems to me……from what “Andy T” just posted as his “bottom line.”

    Now maybe “Andy T” is really disguising his REAL opinions that if he gained power he would be more Agressive…..like he might propose ENDING SS for ALL…or Allowing Taxes on just the $250,000 earners and every one below that cut off because he feels the RICH who earn over $250,000 should be spared taxes because they are the builders of companies and the entrepreneurs. (We heard that 24/7 from Bush II and how did that work out?)

    If “Andy T’s” position is the above then I’d say he’s more a “Larry Kudlow/Friedmanomics “Supply Sider” ..and akin to those who wrecked the whole US Economy with Low Interest Rates…(Housing/CDS , Sucker Liar Loans, etc.,AIG,and the Rest)

    So “Andy T” would seem to be so FREE MARKET that he never sees any Regulation he can Stomach because it’s ALL BAD…and Bubbles are Bubbles and Extremes are what makes Trading GOOD for the Markets. To kill all that with REGULATION would hurt his business and is profession. So…it would seem “Andy T” has some big “skin in the game.”

    Marcus…on the other hand seems to have a farther outlook….Maybe a MACRO PICTURE…as to how the “little person, investor….has to deal with the BIG GUYS like “ANDY T” and “BR” who have to actively manage money for the VERY WEALTHY.

    There’s a bit of “conflict of interest” in the post exchange between “Andy T” and “Marcus.”

    But…it’s fascinating …and THANKS for it!

  33. TakBak04 says:

    Forgive typo’s …too as to…and the rest….I’m on the “fly” and got to fast in my keying…on the run…sorry…

  34. constantnormal says:

    TBTF might be manageable … IF bankster interconnectedness could be managed (it can’t), and if the banksters were not allowed to multiply their risk via leverage without limits.

    But when you allow TBTF and no controls on leverage, it’s only a matter of time before it all blows up. If you don’t limit leverage and control the amount of money at risk, nothing else matters, because you won’t be able to manage the calamity.

    I calmly await financial Armageddon. It is as certain as the sunrise.

  35. [...] abounds on the utility of finreg legislation.  (Big Picture, naked capitalism, [...]

  36. dss says:

    I concur with MA, BR and TakBak04. MA’s summation illustrates a masterful slice and dice of the right wing talking points that permeate our discourse today. There are those who chose not to understand because it will reveal their real agendas, which remain hidden by conservative propaganda, obfuscation and out right lies.

    It is times like these that Orwell’s 1984 remains more and more relevant. Doublethink lives!

  37. gordonq says:

    As I see it the whole economic crisis was started by Clinton’s effectively eliminating capital gain taxes on the short term sale of homes. It touched off speculation in the housing market assisted by realtors and mortgage lenders in order to enable anyone to get a piece of this fat pie by using inaccurate loan application data and thus rake in profits.

    Am I that much smarter than everybody else to understand this? Or is it just political bias that prevents others straying from orthodoxic thinking and stating the obvious?

    ~~~

    BR: That was 1996. it wasn’t until the Fed took rates to zero, and lenders abdicated lending standards that prices moverd two and three standard deviations above the norm.

    So the answers to your questions are:

    1) No, you are not smarter than everybody else;
    2) It is not bias — the data and timeline do not support your thesis;

  38. gordonq says:

    OK, I concede your point one. However, by my estimation, you are wrong on point 2. The housing bubble began in 1997 and the new 500,000 exclusion (couples) began 5/7/97. Is this mere coincidence? I think not.

    (chart has low time-line resolution but the source is trustworthy)
    http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html

    (time-line has better resolution)
    http://mysite.verizon.net/vzeqrguz/housingbubble/