More Snow
It appears we got hit with another 10-12 inches of snow overnight. Schools are cancelled, and my trains are not running into the city yet.
I need to go blow the snow off the driveway, then figure out what I am gong to do today. I was hoping to read the FCIC report, but it does not look like I will get to the store today.
And speaking of Snow Jobs, the dissenters in the FCIC continue their embarrassing foolishness.
The NYT devotes two paragraphs to Peter Wallison — they mention he was “chief lawyer for the Treasury Department and then the White House during the Reagan administration” and that he is “now at the conservative American Enterprise Institute.”
But nowhere do they mention that he was co-director of the AEI’s Financial Deregulation Project. This is a serious omission by a major publication.
The New York Times should be much better than this . . .
Tweet
Facebook
Reddit
Digg this!
January 27th, 2011 at 7:44 am
Barry:
So far you haven’t mentioned the role the Gregory Brothers played in the meltdown. My guess is that it will show up in the full report. In the meantime, we have some auto-tuned news for folks who are snowed in and waiting for the full report.
http://tradewithdave.com/?p=5140
Dave Harrison
http://www.tradewithdave.com
January 27th, 2011 at 7:51 am
“But nowhere do they mention that he was co-director of the AEI’s Financial Deregulation Project. This is a serious omission by a major publication.”
_____________
Why destroy the cred of someone contributing content to your own rag? The story line should be that those who caused the bubble, or who assisted in the blowing up of it, are still in positions of power, but that would be tantamount to self-incrimination, or at least an admission of incompetence on the part of the NYT.
January 27th, 2011 at 8:29 am
A strong defensive position = a firm belief or not knowing better (too lazy, lack of access to information, over-reliance on a single source, etc.) or self-interest (monetary or ego) or some combination of the three. Thanks for calling both the dissenters and the NYT on this, BR. Most of the traditional press seem to have fired all their fact checkers years ago. Remember when the press thought it terrific that they could be embedded with with the army in Iraq? How did that work out for them?
January 27th, 2011 at 9:38 am
dude- driving home from my office yesterday- what a show! Gridlock nightmare traffic out here in DC-
snow came on strong about 5:00 and everyone decided to leave their offices at the same time . . .
January 27th, 2011 at 9:41 am
First of all, people like Wallison should have had no business being on the FCIC.
Second of all, as Brad DeLong said, Holtz-Eakin ought to be ashamed – he used to be a real economist.
January 27th, 2011 at 9:47 am
But nowhere do they mention that he was co-director of the AEI’s Financial Deregulation Project. This is a serious omission by a major publication.
Serious and, no doubt, deliberate. Putting Reagan look-alike, think-alike, sound-alike Wallison on this thing was the moral equivalent of seating Khalid Sheikh Mohammed on the 911 Commission.
January 27th, 2011 at 9:52 am
“But nowhere do they mention that he was co-director of the AEI’s Financial Deregulation Project. This is a serious omission by a major publication.”
—
You weren’t under the impression that anything was/is going to happen as a result of this report were you? And two words for those who think the Times should be better than that. Judith Miller.
The plutocrats are circling the proverbial, um, Bentley’s.
January 27th, 2011 at 9:55 am
There is a good article on bloomberg on how “stop loss” orders mainly lock-in losses:
http://www.bloomberg.com/news/2011-01-27/stop-loss-orders-may-lock-in-losses-when-stocks-plunge-in-volatile-markets.html
Most good pros do not use single stock “stop losses” in any way. Maybe I should say… other than very short-term catalyst driven traders (which typically manage small capital).
January 27th, 2011 at 9:58 am
75 and gorgeous here on the Central Coast of California, no shovels needed
January 27th, 2011 at 11:44 am
another rant from K. Denninger — valid points regarding Fraud often mentioned here
The FCIC Report: Yet Another Whitewash
http://market-ticker.org/akcs-www?post=178427
January 27th, 2011 at 1:52 pm
Reading the Dissenting Statement of
Commissioner
KEITH
HENNESSEY
Commissioner
DOUGLAS
HOLTZ-EAKIN
Vice Chairman
BILL
THOMAS
This is more of a academic white paper on the Global Macro Economic analysis. They setup the dissent indicating that the full report was too broad and many times painted with a broad brush, however this paper elevated the crisis to even a higher level perspective. Although what they have written is a good primer on the crisis it leaves the reader with “there were a lot of things that contributed to the bubble” and apparently the major cause was the global trade imbalance which set into motion $T’s in trade imbalance cash flows into higher priced risky assets (housing, not just US but worldwide). Again, good as a set up, but it the rest of the story of FRAUD, loose underwriting standards, lack of regulatory competence, FRAUD, failure of risk management, FRAUD, cozy relationship between FIRE and Gov’t (Lobby$ and Political Contributions $) …
After watching the testimony and reading the content on the FCIC website, I expect this type of paper from Hennessey and Holtz-Eakin but NOT from Bill Thomas, he was much more aggressive on the fraud, corruption, unethical, malfeasance from the bad actors in the FIRE sector than what is being highlighted here.
~~~
BR: The technical term you are looking for is SHITE
January 27th, 2011 at 2:29 pm
Peter Wallison’s dissent — Long paper loaded with housing market data. He comes to the conclusion it was the gov’t housing policies, the CRA and the utilization of the GSEs as a channel for executing the policy that lead to the crisis. These contributed to the bubble blowing (or in his analogy created the tinder dry forest), but was not the single smoking gun that caused the crisis. So, Walllison’s paper is another backgrounder reference for supporting a piece of the puzzle, but far off the track of the “Cause of the Crisis”
His last sentence: Finally, if the principal cause of the financial crisis was ultimately the
government’s involvement in the housing finance system, housing finance policy in
the future should be adjusted accordingly.
If involvement means: establishing a cozy relationship between policy, law and the FIRE sector; then YES shut down those doors. Eliminate the lobby and revolving door between the regulators, administration and the industry.
If getting gov’t out of housing finance means: End the moral hazard from a gov’t backstop; then YES.
January 27th, 2011 at 8:02 pm
Douglas Holtz-Eakin was on the PBS Newshour tonight trying to defend the Republicans FCIC minority report.
What a whore.
January 27th, 2011 at 8:06 pm
obsvr-1,
“Peter Wallison’s dissent … comes to the conclusion it was the gov’t housing policies, the CRA and the utilization of the GSEs as a channel for executing the policy that lead to the crisis.”
NOPE.
January 27th, 2011 at 11:46 pm
I found the 3-person dissent entirely innocuous — it wasn’t really a dissent at all, just a mechanism to make the committee’s output appear to be a partisan outcome.
Wallison’s paper, however, has numbers and stuff but avoids the cold hard facts of what actually happened between 1Q02 and 4Q06, when total household mortgage debt rose from $5.5T to $10T.
That’s where the bodies are buried.
One risible factoid Wallison threw in was the NMT total of $4.5T over 27 million mortgages. That’s an average of $160,000 per mortgage, which offends my sensibilities because I believe it was the big-money loans *over* the GSE conforming limits that were the primary drivers of both the bubble debt and all the helicopter money that was escaping into the wider economy via HELOCs and cash-out refis.
The conforming loan limit was $360,000 through 2005. 95% of peak market valuation was reached in 3Q05.
Poor people really had f— all to do with the $22T bubble.
January 27th, 2011 at 11:47 pm
^ NTM not NMT above