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Nicole Gelinas tracks what went wrong causing the financial crisis in a long piece in City Journal in which she reviews 10 books on the credsis.
In January 2007, four small-time fund managers with few Wall Street connections invited themselves to a Las Vegas conference of players in the mortgage-bond business. The interlopers’ mission: to see if they were wrong in betting against subprime mortgage securities. They found a money manager who couldn’t care less if his clients lost everything on mortgage-related collateralized debt obligations (CDOs): he made money on quantity, not quality. They found a Bear Stearns CDO salesman more interested in playing cowboy at a shooting range than in discussing the housing market. They found ratings analysts utterly indifferent to their crucial jobs—assessing the risk of trillions of dollars’ worth of mortgage-related securities. And they learned about some of the average people who had taken out so many mortgages, including a stripper who was juggling five home-equity loans, all dependent on ever-rising home prices.
The four men went home surer than ever that “this is a fictitious Ponzi scheme,” as one of them told journalist Michael Lewis, who recounts the story in his gripping new book The Big Short: Inside the Doomsday Machine. “Convinced that the entire financial system had lost its mind,” they ramped up their bets. One of the men told his mother that America risked “the end of democratic capitalism”; she suggested that he take an antidepressant. But the four were right, of course, and once enough investors agreed with them, the housing and financial bubbles burst and drove the economy into a deep contraction. …
Once and awhile we slap around Trent Lott, our poster boy for unprincipled Republicans. This weekend he showed us why. Club for Growth has the story.
… In Sunday’s Post, Lott said of 2011’s likely incoming Tea Party-friendly freshmen, “We don’t need a lot of Jim DeMint disciples … As soon as they get here, we need to co-opt them.” According to OpenSecrets.org, Lott is currently a registered lobbyist for corporations that supported the 2008 Wall Street bailouts, the 2009 stimulus, the cap-and-trade energy tax, and the financial regulatory reform bill.
What’s it like in Trent Lott’s Washington? Well, we don’t know if he got one, but 30 Senators and staffers got sweetheart loans from Countrywide. WSJ has the story.
U.S. senators or Senate employees received 30 loans—far more than had previously been known—under a controversial lending program at Countrywide Financial Corp. that provided cut-rate terms to favored borrowers.
The information is contained in a letter sent to the Senate Select Committee on Ethics by Rep. Darrell Issa (R., Calif.), who has been spearheading the House Oversight and Government Reform Committee’s investigation into Countrywide’s so-called VIP mortgage program.
No specific loan recipients were named in the letter. But Mr. Issa’s letter said borrowers on a dozen loans listed their place of employment as the office of “Senator Robert Bennett.” Available public records don’t indicate that Sen. Bennett, a Utah Republican and member of the Senate Banking Committee, received a Countrywide home loan. …
Daniel Hannan, a member of the British Parliament blogs at Telegraph, UK. Recently he posted a favorable review of Peter and Andrew Schiff’s new book – How an Economy Grows and Why it Crashes. We have that here, plus You Tube links to Daniel Hannan’s great 3 minute speech at the EU Parliament, and a montage of Peter Schiff’s warnings, in no uncertain terms, about the crash we would experience in 2008.