An oldie but goodie, now that the story of how the Affordable Housing Act created the sub-prime mortgage meltdown is being rolled out again.
Brad DeLong's Egregious Moderation
David Goldstein and Kevin Hall: Private sector loans, not Fannie or Freddie, triggered crisis
Posted by Brad DeLong, October 11, 2008
4 comments:
It seems this story and copies of it at other sites have been taken down.
I think I found it here...
http://archive.truthout.org/101408K
Turns out this article was posted at McClatchy in October, 2008, prior to the last election. I found it at Brad Delong's and updated the post here to reflect this. Still true and applicable, since that old myth is being rolled out again. Hard to kill zombies.
Of course it had nothing to do with those that designed and engineered the "models" which required vast amounts of debt supply to be sucked into the vortices of Wall street quantitative modeling crews ...
given that a lot of those modeling engineers were from Russia, Germany, and Japan - I wonder how much of it was economic sabotage ?
REMEMBER : the foreclosure was only a $300 to $450 billion dollar problem which could have been taken care of by classical, definitely not MMT, elastic currency theory as shown in the SnL crisis of 1988.
However, the debt vorticies are what amplified this - the "elegant" models for derivatives.
Any company still using these ?
Goldman Sachs was on both sides of the equation as we know.
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