The Auto Bailout Failure
A new paper from the Buckeye Institute affirms what the Antiplanner has said about the Obama administration’s “bailout” of the auto industry: it did more harm than good. “The auto bailout transferred over $25 billion in taxpayer dollars to the United Autoworkers labor union,” says the paper, “while actually hindering the kind of ‘fresh start’ […]
Book Review: All the Devils Are Here
In the Antiplanner’s recent review of Margin Call, I wrote, “No bank secretly realized that mortgage-backed securities were worthless and unscrupulously sold them to unsuspecting buyers.” The authors of All the Devils Are Here would apparently disagree. Unlike most of the books about the financial crisis that the Antiplanner reviewed last year, which each tended […]
Movie Review: Margin Call
Margin Call opened four months ago, so this review isn’t exactly timely, but for readers who haven’t seen it, it purports to be about the 2008 financial crisis. Since the Antiplanner has written extensively about this crisis, I found the movie intriguing enough to watch the DVD. The entire picture takes place during about 27 […]
Two Ways of Preventing the Crisis
One of the more common notions about the housing bubble is that it was caused by political pressures to increase homeownership. The Antiplanner’s view is that it would be more accurate to say that the bubble was caused by the conflict between policies aimed at increasing homeownership and policies aimed at reducing homeownership (or, at […]
Market Asymmetry
Along with Michael Lewis’ The Big Short, Gregory Zuckerman’s The Greatest Trade Ever shows that at least some investors were aware that the housing bubble of the mid-2000s was likely to collapse, with severe repercussions on the economy. The book (whose alternate subtitle is “How One Man Bet Against the Markets and Made $20 Billion”) […]
Contributing Factors, Part Two
Be sure to read part one first. Greedy bankers: Changes in the banking industry caused the crisis, many writers claim, by creating perverse incentives to earn short-term profits by making long-term risks. “High leverage and risk-taking in general was fueled by the Street’s indulgent compensation practices,” says Lowenstein (p. 287). A prime example is Joseph […]
Contributing Factors, Part One
Today and tomorrow, as a part of the Antiplanner’s continuing series about the 2008 economic meltdown, I am going to look at many of the supposed causes of the crisis and show that, while some of them may have made the crisis worse, none of them were the ultimate cause of the crisis. In some […]
A Crisis of Reserves
The Antiplanner continues to read recent books about the 2008 financial crisis, but there are definite diminishing returns. I just finished Roger Lowenstein‘s The End of Wall Street and found it disappointing. It covered almost exactly the same ground as Too Big to Fail, but unlike the latter book, which was based mainly on interviews, […]
The Ratings Game
Lots of groups have been blamed for the recent financial crisis, including the Federal Reserve, banks, and Congress for deregulating financial institutions by repealing the Glass-Steagall Act (which separated banks that accepted deposits from investment banks). One that deserves scrutiny is the ratings agencies–Moody’s, Standard & Poors, and Fitch–that gave AAA ratings to bonds made […]
Antiplanner’s Library: Freefall
Nobel-prize-winning economist Joseph Stiglitz‘s take on the 2008 financial crisis is simple: Free markets are bad; government is good; we need more government. This is, essentially, a reiteration of what is known as the Greenwald-Stiglitz theorem, which states that markets are imperfect, so “government could potentially almost always improve upon the market’s resource allocation.” A […]
Antiplanner’s Library: Fool’s Gold
As previously noted, the Antiplanner has been reading a lot of books about the financial crisis lately. Some have tried (but failed) to be comprehensive. Most cover just a slice of the crisis, such as Bear Stearns (House of Cards) or Lehman Brothers (A Colossal Failure of Common Sense) One of the most valuable books […]
Antiplanner’s Library: Too Big to Fail
The Antiplanner finished reading Too Big to Fail, a 539-page tome describing the events of the financial crisis from the Bear Stearns collapse in March, 2008 to the Treasury’s forced purchase of billions of dollars worth of shares in nine major banks in October, 2008. New York Times reporter Sorkin says the book is based […]
