Affordable Housing Institute : US

[Continued from yesterday’s Part 1.]

Yesterday we knocked off a handful of things the credit crisis wasn’t:
 

 
1. Not an asset bubble … a systematic under-pricing of risk.
2. Not caused by subprime lending … although that was the miner’s canary.
3. Not principally about the GSEs … because other financial institutions are in much worse shape
4. Not just […]

Abandon all logic, ye who write about the financial crisis
 
So far a lot of nonsense has been written – mostly in the popular rather than professional press – about what the financial crisis is.  In fact, the Panic of 2008 is a global repricing of risk, the hangover from a decade of binge financial risk-taking […]

“Yawning is contagious,” I told the International Union of Housing Finance (IUHF) audience.  “Sneezing is contagious.  As we saw last night at the boma dinner, dancing is contagious.”  Small chuckles.  “Drinking is contagious.”  Larger chuckles.  “Risk-taking is very contagious.  And for a decade or so, the world has been drunk with risk-taking, and become de-sensitized to […]

[Continued from yesterday’s Part 1.]
 
In our quest to understand Treasury’s recent moves in the market, we’ve identified three overriding principles:
 

No Great Depression on my watch, got it?
 
1. Prevent the Second Great Depression
2. Keep the GSEs in the loan-buying business. 
3. Do as little as possible, if that
 
The first is the goal that can never speak […]

By their works ye shall know them, as the saying goes, and over the last few weeks, we have found the world’s financial markets gyrating hysterically as they seek to decipher what the new ruling troika of Paulson, Bernanke, and Geithner will do next.
 

New York Times: Ben Bernanke, far left; Tim Geithner, far right
With […]