Take for example the following by David Brooks concerning the subprime mortgage disaster:
- Mortgage crisis analysis unpopular, true
DAVID BROOKS; THE NEW YORK TIMES
Published: January 27th, 2008 01:00 AM
There is roughly a 100 percent chance that we’re going to spend much of this year talking about the subprime mortgage crisis… The only question is which narrative is going to prevail, the Greed Narrative or the Ecology Narrative.
The morality of the Greed Narrative is straightforward. A small number of predators destabilize the economy and reap big bonuses… Government should step in and control the malefactors of great wealth
When a new instrument enters the market, it takes a while before people understand and institutionalize it. Whether the product is high-yield bonds or mortgage-backed securities….
In the first stage of this adolescence, investors look around and see everybody else making money off some new instrument… Individual bankers have a special incentive to get in on the ride because their yearly bonus is determined by how they do in the short term.
Then there’s a moment when people realize how stupid they have been. They’ve bought a pile of subprime mortgages without really knowing what they’ve purchased… The cycle of overconfidence becomes a cycle of underconfidence because nobody knows who is holding worthless paper.
Then, finally, maturity sets in. Those who have lost great gobs of money get fired. People still find the new product useful, but within parameters and with greater safeguards.
From the UK Guardian:
- FBI investigates sub-prime crisis
guardian.co.uk, Wednesday January 30 2008
Fourteen companies, including some of the world's largest banks, are being investigated over possible accounting fraud, improperly securing loans and insider trading during the sub-prime mortgage scandal.
The FBI said yesterday that it had opened criminal investigations into improper lending in the American housing market. Neil Power, head of the FBI's economic crimes unit, told journalists that the investigation includes the companies that securitised the loans and investment banks that bought those products, as well as the developers and sub-prime lenders.
"We're looking at the accounting fraud that goes through the securitisation of these loans," said Power.
No, not really that shocked. Collective amnesia is a hall mark of Movement Conservatism, whether it is the S&L debacle of the 80's or the Ear Mark Excess of the last 7 years.
Water carriers like Brooks the buffoon figure that if they print this fertilizer often enough, Mr. John Q Public will forget about how he has been royally screwed by this Administration. They need John Q to pay no attention to complex matters like economics (Johnnie Mack does not understand it) and concentrate on the real issues: Gay Marriage Illegal Immigrant Secular Humanistic Terrorist.