A Question for the Finance Types
I’m wondering if any blog readers can explain something to me. Back in the old days, banks didn’t package and resell the mortgages they wrote. So when a homeowner got into trouble, they could go down...
View ArticleWhat Kind of Stories Are the Media Failing to Cover?
Dan Froomkin of the Nieman Watchdog Project interviews William K. Black about the media’s underreporting of fraud cases. Black, a regulator and professor at the University of Missouri-Kansas City,...
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Flawed Incentives and Dubious Morals: JPMorgan & CDOs That Were "Built to Fail"
It’s been a busy week for JPMorgan Chase. It’s only Wednesday, and already the bank has settled one civil fraud lawsuit and been slapped with another one. Both shed light on Wall Street’s flawed system...
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Did Rating Agencies Give Preference to Big Banks?
(Polka Dot) At the heart of the financial crisis was the market for mortgage-backed securities (MBS). These are the “toxic assets” that larded up bank balance sheets and all but froze the credit...
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Dear Occupy Wall Street: Are You Sure You're in the Right Place?
Photo: david_shankbone I get it – people are angry. Very, very angry. I’m angry too. And Wall Street sure makes a great scapegoat, hence the Occupy Wall Street protest. Wall Street is a symbol of the...
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Learning From the Last Great Mortgage Mess
We’ve had the good fortune over the last few years here at the blog to bring you occasional nuggets from University of Arizona economist Price Fishback, whose research on the Great Depression often...
View ArticleFinancial Literacy Solutions, Information-Design Edition
In our latest podcast, “What Do Hand-Washing and Financial Illiteracy Have in Common?” we talked about America’s financial literacy problem, a topic we’ve written about before. In the podcast, two...
View ArticleWho Suffered Most in the Housing Bust?
A new working paper (abstract; PDF) looks at how the recent housing bust affected minorities. Economists Patrick Bayer, Fernando Ferreira, and Stephen L. Ross looked at mortgage outcomes “for a large,...
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The Folly of Eminent Domain Takings of Failing Mortgage Loans
(Comstock) University of Arizona economist Price Fishback, who has been on this blog before, is one of the leading scholars of the economics of the New Deal. He has a great new set of insights to share...
View ArticleWhy the CFPB’s Qualified Mortgage Rule Misses the Mark
This post grows out of two working papers (downloadable here and here) I’ve written with Joshua Mitts, a former student of mine who is now working at Sullivan & Cromwell. Why the CFPB’s Qualified...
View ArticleThe FREAK-est Links
New study tries to predict sources of future pandemics. (Earlier) “The Subprime Primer”: a mortgage crisis in illustration. What’s the worst company in America? Cast your vote. The white lies of...
View ArticleWhy Do Mortgage Brokers Get Paid Everything Up Front?
Blog reader Chris Harris raises an interesting question in an email to us: Why do mortgage brokers get paid everything up front when they originate a deal? This sort of contract gives brokers terrible...
View ArticleRecourse, Of Course
Martin Feldstein has written another Wall Street Journal op-ed (here’s an NBER version) extending his idea for stabilizing home prices. Steven Levitt has written about Feldstein’s basic idea before....
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