Can you spell?

[Darren Dirt]

Robert Shiller's Seven Easy Chapters to Solving The Crisis (?)

"The Subprime Solution: How Today's Global Financial Crisis Happened, and What to Do about It"

...or maybe this book is just a first-to-the-marketplace "I warned you guys..." book?


One apparently knowledgeable reviewer seems to give it the "thumbs down", essentially "okay on the diagnosis part, terrible on the solutions part"

Quote:When Shiller comes up with recommendations he is not convincing. In the short-term he simply suggests we bail out everybody by reviving the Home Owners' Loan Corporation (HOLC) first established in 1933 but no longer in existence. The former HOLC accepted mortgages as collateral for loans to mortgage lenders so long as the mortgages had more lenient terms than the market. This recommendation has several flaws to it. First, it runs into moral hazard. It would bail out with taxpayer's money homeowners who never had the financial resources to buy a house and condo flippers who speculated with other people's money. Second, a good deal of those mortgages has been securitized into complex collaterized bond structures with many tranches sold to international investors. Those mortgages administered by bond trusts are not pledgeable to an HOLC organization.

Shiller's long term recommendations are ineffective.

...and so the Expert Opinion Circus continues... And the MSM continues to give Ron Paul* and others a quiet nod of acknowledgement, then back to the "Save Us Oh Great Nanny State!" ruminating and pontificating that just makes things worse...


So, AiLL'ers, how's your "job" stability?  :wishmeluck:




*good "special to CNN" article by Dr. Paul, but the comments are the best (most encouraging) thing about it! For example

Quote:by "Matt in MS":
We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."
-2008 GOP Platform

'nuff said



Also, by "Jefferson":

Quote:This is the single best piece of analysis I've read of the current situation published in the mainstream media.

What alarms me the most is that the level of economic ignorance among policy makers is truly astounding. It is trite to recall Santayana's oft-quoted words that those who fail to learn from history are predisposed to repeating it, including its mistakes.

Yet, few policy makers have the mental framework to grasp economic fundamentals: ignoring the past now occurs because few have the ability to learn from its mistakes. In a twisted way, it's fun to watch policy makers trying to discuss mortgage-backed securities or collateralized debt obligations, because most of them have absolutely no clue what the heck they're talking about.

It's also sad that the economics profession has gotten this low: The dominant economic theories today are akin in sophistication and correctness to a medieval mystic's view of the universe. Implementing policies guided by those principles is like planning a Moon voyage with a belief that the Earth is flat, or like trying cure cancer with leeches.

I have a really difficult time believing that people just don't know any better, and don't realize that this sort of "bail out" is now bringing us closer to the type of economy German and Italy had - in the 1930s.

I also don't understand how people can watch their currency (the medium most people in this country hold their savings in) being completely destroyed in front of their eyes, only to benefit politicians seeking re-election and Wall Street fat cats.

Where are the pitch-forks?