NYT: Blaming the Fed for the Sub-Prime Mortgage Crisis


“Hindsight is always 20-20, but it’s clear the Fed should have acted earlier. Financial innovation is great, but you have to have some basic rules. One of the most basic rules is that a borrower should have the ability to repay.”

–Sheila C. Bair,chairman of the Federal Deposit Insurance Corporation


Back in August, I wrote a piece titled The Ongoing Impact of the Housing Sector.  In that, I discussed all the many people responsible for the sub-prime housing crisis (which has subsequently led to the present credit crunch).    

I singled out the Fed for two reasons: 1) taking rates down to ridiculous levels and leaving them there for too long,  and 2) their failure to adequately perform their banking regulatory responsibilities when it came to the origination of mortgages.

Today’s page one NYT article covers the latter in grisly detail Fed and Regulators Shrugged as Subprime Crisis Spread. They single out Greenspan for his part in allowing unregulated problems to fester.

You can read the full article there, but here I wanted to emphasize the graphic:

click for larger version2007subprime

courtesy of NYT

Download ginormous version: 2007subprime.jpg


As we have seen in oh so many different contexts, the blind adherence to dogma and ideology, from religious zealots to acolytes of Ayn Rand, seems to only lead to a broad range of problems, ranging from errors in judgment to  unnecessary pain. Ultimately, most political and economic extremists collapse under the weight of their own slavish devotion to a universal idea that is inapplicable to a specific situation. Some people call this consistency, but the word "stupidity" means the same thing, and can be typed with less letters.

I’ll take a pragmatic technocrats over the syncophants, idiots and idealogues any day of the week . . .   


Fed and Regulators Shrugged as Subprime Crisis Spread
NYT,December 18, 2007

The Ongoing Impact of the Housing Sector
Barry Ritholtz 
Investors Insight, August 24, 2007   

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Friday Night Jazz Rock-N-Roll

I was planning on doing a Jazz post this evening, but the week’s biggest musical news — the one-night only reunion concert by Led Zep — had to take precedence.

What’s that you say? One night only?

Unfortunately, it is true:  Robert Plant, not Zeppelin, is touring in May 08 with album mate Allison Kraus.

As previously mentioned, I am an enormous Led Zep fan.  However, despite having seen a bazillion concerts, to my everlasting regret, I never managed to see Zep live.

This was going to be my big chance. 

To make matter worse, the reviews from the show in London have been spectacular:


Led Zeppelin’s Rocking Return  (WSJ)
Led Zeppelin Finds Its Old Power (NYT)   
Led Zeppelin Reunion Wows London (Bloomberg)
Led Zeppelin rocks again in London (LAT)          

MothershipYou get the idea.

While a tour seems to be on hold (at least for now), Zep’s album sales have skyrocketed in the UK:  Music retailer HMV also revealed that sales of Led Zeppelin’s Mothership 2CD/1DVD, Led Zeppelin’s recent compilation album, rose by 50% overnight following the gig. Mothership was the biggest selling album in HMV stores in the UK on December 11.

And, the rest of the band’s album sales were up 500%, as fans snapped up the back catalogue after O2 Arena show, according to music site NME.

When old meets new, you can expect snafus, and this "happening" was not without a curious one: Zeppelin’s reunion concert clips were inadvertently pulled from YouTube; It turns out that an Anti-Piracy firm had the Zeppelin reunion videos removed "by mistake." 

As always, videos after the jump.

- Led Zeppelin Official Site
- Every concert set list from every Zep live show. ever.
- Reunion Announcement
- Wikipedia entry




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