It’s unfortunate that after finally getting a blog, Jeffrey Friedman’s Causes of the Crisis has been updated so infrequently. I was visiting it to argue a point against Russ Roberts when I noticed a new post on Peter Wallison. Don’t be scared by the link to AEI, a lot of it is pretty good. I don’t agree that government was responsible for all the demand side problems, but his explanation of the Gramm-Leach-Bliley Act (and exactly what it changed from Glass-Steagall) is worth hearing. He also gives a good case study with Lehman Brothers on the effect of a CDS guarantor going bust. I’d heard similar stuff from Charles Davi, but this was less theoretical and showed its relative size when the crash occurred.

It’s old news, but if you share Matt Taibbi’s fear of naked short selling, John Carney (who I also think is wrong about the CRA) gives a good explanation for the layman.

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