Category Archives: Financial Crisis of 2008

I Disagree with Brad DeLong

Posted on February 1, 2015 by Arnold Kling

He writes, Martin Wolf’s The Shifts and the Shocks; and my friend, patron, teacher, and (until the last reshuffle) office neighbor Barry Eichengreen ‘s Hall of Mirrors. Read and grasp the messages of both of these, and you are in … Continue reading →

Posted in books and book reviews, Financial Crisis of 2008 | 8 Comments

How to Live Beyond Your Means

Posted on January 29, 2015 by Arnold Kling

1. The WaPo reports, Today, they struggle under nearly $1 million in debt that they will never be able to repay on the 3,292-square-foot, six-bedroom, red-brick Colonial they bought for $617,055 in 2005. The Boatengs have not made a mortgage … Continue reading →

Posted in Eurozone Crisis, Financial Crisis of 2008 | 10 Comments

PG County Foreclosure Story Focuses on the N-word

Posted on January 28, 2015 by Arnold Kling

This WaPo story is long, but nonetheless incomplete. Using court and land records, The Post analyzed 173 home purchases in Fairwood that wound up in foreclosure between 2006 and 2008. In 43 of those home purchases, borrowers financed 100 percent … Continue reading →

Posted in Financial Crisis of 2008, Housing and housing finance, income distribution-wealth-poverty | 13 Comments

What I am Reading

Posted on January 23, 2015 by Arnold Kling

1. Michael Shermer, The Moral Arc. I am only a few pages in, and he already has cited Bill Dickens and Bryan Caplan, among others. 2. Jeffrey Friedman and Wladimir Kraus, Engineering the Financial Crisis. This is a re-read for … Continue reading →

Posted in books and book reviews, Financial Crisis of 2008, links to my essays | 6 Comments

Peter Wallison and the N-word

Posted on January 15, 2015 by Arnold Kling

He says, By 2008, before the financial crisis, there were 55 million mortgages in the US. Of these, 31 million were subprime or otherwise risky. And of this 31 million, 76 % were on the books of government agencies, primarily … Continue reading →

Posted in Financial Crisis of 2008, Housing and housing finance | 9 Comments

Narrative is the New Baloney Sandwich

Posted on January 4, 2015 by Arnold Kling

Brad DeLong writes, When it became clear in late 2008 that the orgy of deregulation coupled with global imbalances was confronting the global economy with a shock at least as dangerous as the Great Crash that had initiated the Great … Continue reading →

Posted in Financial Crisis of 2008, Mark Thoma is Indispensable | 5 Comments

A “Tough” Capital Rule for Big Banks?

Posted on December 13, 2014 by Arnold Kling

So the headline says. But from the actual article, The extra core-capital requirement could be as high as 4.5 percent of risk-weighted assets on top of the baseline 7 percent defined under rules known as Basel III, according to analysts … Continue reading →

Posted in Financial Crisis of 2008 | 1 Comment

My Review of Peter Wallison’s Forthcoming Book

Posted on December 9, 2014 by Arnold Kling

is here. Wallison’s thesis is that policymakers in Washington underestimated the significance of the surge in nontraditional mortgages. What is perhaps even more deplorable is the way that these mortgages continue to be downplayed in the mainstream narratives of the … Continue reading →

Posted in books and book reviews, Financial Crisis of 2008, Housing and housing finance | 1 Comment

Central Planning, Capital Regulations, and the Risk Premium

Posted on December 4, 2014 by Arnold Kling

Per Kurowski writes, current credit-risk-weighted capital (equity) requirements for banks, allow banks to hold government debt and loans to the AAAristocracy against much less equity than when financing “risky” small businesses and entrepreneurs, and so that is de facto what … Continue reading →

Posted in Financial Crisis of 2008, Growth Causes and Consequences, links to my essays | Comments Off

How the Fed Became a Giant Hedge Fund

Posted on November 23, 2014 by Arnold Kling

Jeffrey Rogers Hummel tells the story. Phase Two of Bernanke’s policies transformed the Federal Reserve from a central bank confined primarily to managing the money supply into an institution that is now a giant government intermediary borrowing massive sums in … Continue reading →

Posted in Financial Crisis of 2008, Monetary Economics | Comments Off