Tag Archive for Financial Crisis

Three Passages From Akerlof & Romer’s 1993 Article That Should Have Prevented The Crisis

This is the first installment of a series of articles about the media, finance industry, political, and Department of Justice (DOJ) reaction to Michael Lewis’ new book about high frequency trading (HFT). The media ballyhooed the book as if it were an amazing revelation of a fact of surpassing importance. The industry demonized the book and Lewis. DOJ immediately announced it had begun a criminal investigation and the SEC it had multiple investigations pending. Whether the industry or Lewis is correct about HFT practices (which he asserts are lawful) is unimportant for some purposes. My series will focus on the difference between the frenzied DOJ, political, and media reaction to Lewis’ criticism of allegedly lawful HFT practices and the “yawn” reaction of these same groups to the vastly more damaging criminal frauds runs by our elite financial leaders that caused the financial crisis is astronomical, ludicrous, and disastrous.

Ten Lessons We Must Learn from Charles Keating

I knew Charles Keating, the head of Lincoln Savings, in my capacity as a financial regulator and as the subject of his wrath. His fraud schemes and the manner in which they targeted our system’s vulnerabilities in an era before Citizens United made the corruption of politicians by fraudulent CEOs child’s play remain the play book for the world’s most destructive financial frauds.

Arnold Kling’s Cunning Hairdresser Theory of the Financial Crisis – Bill Black

Arnold Kling is a libertarian economist who once worked for Freddie Mac. This article discusses a blog and an article he wrote about the causes of the crisis. Both (unintentionally) illustrate key theoclassical economic positions critical to understanding the origins of the crisis. Kling’s blog was in response to a January 29, 2013 post by Thomas J. Sugrue. Sugrue provided data demonstrating that blacks and Latino homeowners suffered far greater wealth losses in the crisis than did whites.

Non-Lessons of the Financial Crisis- James Kwak – The Baseline Scenario

This is a syndicated repost courtesy of The Baseline Scenario. To view original, click here. Reposted with permission. As the fifth anniversary of the Lehman bankruptcy approaches, the Internet is filling up with reflections on the financial crisis and the ensuing years. My main feeling, as expressed in my latest Atlantic column, is amazement at how little…

The New York Times is Wowed that Obama’s Six Rubinites Support Larry Summers – Bill Black

This is a syndicated repost courtesy of New Economic Perspectives. To view original, click here. Reposted with permission. The Obama administration, for reasons that pass all understanding, has been running a campaign of leaks disparaging one of Obama’s few senior female appointees, Janet Yellen.  Her high crimes include not being a protégée Bob Rubin and…

Two Sentences that Explain the Crisis and How Easy it Was to Avoid – William K. Black

Everyone should read and understand the implications of these two sentences from the 2011 report of the Financial Crisis Inquiry Commission (FCIC).

“From 2000 to 2007, [appraisers] ultimately delivered to Washington officials a petition; signed by 11,000 appraisers…it charged that lenders were pressuring appraisers to place artificially high prices on properties. According to the petition, lenders were ‘blacklisting honest appraisers’ and instead assigning business only to appraisers who would hit the desired price targets” (FCIC 2011: 18).