“It is the private trading of complex instruments that lurk in the financial shadows that worries regulators and Wall Street and that [has] created stresses in the broader economy. Economic downturns and panics have occurred before, of course. Few, however, have posed such a serious threat to the entire financial system that regulators have responded as if they were confronting a potential epidemic.”
—New York Times, What Created This Monster? by Nelson D. Schwartz and Julie Creswell, March 23, 2008
What began as a collapse in subprime mortgage-based securities (the result of higher interest rates…leading to programmed, but unplanned-for increases in adjustable-rate mortgage payments…leading to increased loan defaults…leading to plummeting investor confidence…leading to…) has now become a full-fledged credit contraction.
The negatives of this contraction affect both the meek and the mighty. Continue reading “Subprime Thinking”
mother-of-pearl, has not created value. In fact, U.S. policy has rendered Cuba nearly irrelevant.
What actually happens is not always in the history books.
Roger Clemens testifies before Congress, and the House Committee on Oversight and Government Reform grills him about use of steroids and human growth hormone. He denies everything.
