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Can anyone supply a link to an article that actually explains the stuff that this article purports to be about? The test of "actually explains" being "explains

by pg 18y ago

Can anyone supply a link to an article that actually explains the stuff that this article purports to be about? The test of "actually explains" being "explains how to prevent."

earl 18y ago
Paul: There is probably more than a single article's worth in terms of explaining how to prevent, but you could start with Barry Ritholtz' blog http://www.ritholtz.com/blog http://www.ritholtz.com/blog -- he also has a book coming out that will probably be very illuminating: http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpictu09-20 http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpict... . You might also try nakedcapitalism.com, another well respected blog.
gasull 18y ago
This article explains what needs to be done and what needs to be stopped: http://www.aspousa.org/index.php/2009/03/no-we-cant/ http://www.aspousa.org/index.php/2009/03/no-we-cant/ FTA: What is the biggest impediment in 2009 to mitigating the harmful effects of energy problems in the 21st century? The answer may surprise you—it is insolvent zombie banks and our entrenched FIRE economy (Finance, Insurance, Real Estate). Or if you want a quick 10-minute explanation of what should be done watch this interview with Michael Hudson: http://www.youtube.com/watch?v=3pwAFohWBL4 http://www.youtube.com/watch?v=3pwAFohWBL4 My favorite source for economic news is entrepreneur Eric Janszen's articles at http://itulip.com http://itulip.com . HTH.
martythemaniak 18y ago
Matt Tiabbi does write with a certain muckraker-type style, and because it's only an article, it can only go so deep in the story. Having said that, as far as I can tell what he says is pretty much spot on and very much factually correct. One example: He spends a few sentences explaining how banks created CDOs: take some good loans, take some bad loans, put them together and using some math convince regulators and investors that these things are AAA rated. Wired wrote an article (itself not that detailed) explaining the formula that allowed them to do this: http://www.wired.com/techbiz/it/magazine/17-03/wp_quant http://www.wired.com/techbiz/it/magazine/17-03/wp_quant I don't think there can be an article that explains this stuff. Some years from now, someone who is both smart and an excellent writer will be able to look back and write a book that explains everything, but until then this stuff will be about as good as it gets. Details on "how to prevent" are even harder, and you'll probably have to look at the upcoming G20 summit in April where the Europeans will try to at least start talking about some kind of regulatory framework, while the Americans will just want everyone to throw more money at the same people that fucked things up.
- anamax 18y ago
  > One example: He spends a few sentences explaining how banks created CDOs: take some good loans, take some bad loans, put them together and using some math convince regulators and investors that these things are AAA rated. You write that like it's wrong or in error. As Google has demonstrated, you can create something that it is more reliable than its parts. A bundle of somewhat independent things has less variance than the pieces.
  - petewarden 18y ago
    "somewhat independent" is the crux of the problem. In a crash the only things going up are the correlations. The modelling behind mortgage securities assumed that defaults were uncorrelated based on the short time period they based them on. Now we know better.
    - anamax 18y ago
      Misunderstanding correlations among defaults was part of it but the other big surprise was that different asset classes which less independent than thought. For example, no one expected an increase in mortage defaults to be accomplied by problems in stocks. In fact, its likely that these two things fed each other, that the unexpected correlation in defaults is at least partly due to the unforseen correlation across asset classes and the unforseen correlation across asset classes is at least partly due to the unexpected correlation in defaults.

by pg 18y ago

Can anyone supply a link to an article that actually explains the stuff that this article purports to be about? The test of "actually explains" being "explains how to prevent."

earl 18y ago

Paul: There is probably more than a single article's worth in terms of explaining how to prevent, but you could start with Barry Ritholtz' blog http://www.ritholtz.com/blog http://www.ritholtz.com/blog -- he also has a book coming out that will probably be very illuminating: http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpictu09-20 http://www.amazon.com/exec/obidos/ASIN/0470520388/thebigpict... . You might also try nakedcapitalism.com, another well respected blog.

gasull 18y ago

This article explains what needs to be done and what needs to be stopped: http://www.aspousa.org/index.php/2009/03/no-we-cant/ http://www.aspousa.org/index.php/2009/03/no-we-cant/ FTA: What is the biggest impediment in 2009 to mitigating the harmful effects of energy problems in the 21st century? The answer may surprise you—it is insolvent zombie banks and our entrenched FIRE economy (Finance, Insurance, Real Estate). Or if you want a quick 10-minute explanation of what should be done watch this interview with Michael Hudson: http://www.youtube.com/watch?v=3pwAFohWBL4 http://www.youtube.com/watch?v=3pwAFohWBL4 My favorite source for economic news is entrepreneur Eric Janszen's articles at http://itulip.com http://itulip.com . HTH.

martythemaniak 18y ago

Matt Tiabbi does write with a certain muckraker-type style, and because it's only an article, it can only go so deep in the story. Having said that, as far as I can tell what he says is pretty much spot on and very much factually correct. One example: He spends a few sentences explaining how banks created CDOs: take some good loans, take some bad loans, put them together and using some math convince regulators and investors that these things are AAA rated. Wired wrote an article (itself not that detailed) explaining the formula that allowed them to do this: http://www.wired.com/techbiz/it/magazine/17-03/wp_quant http://www.wired.com/techbiz/it/magazine/17-03/wp_quant I don't think there can be an article that explains this stuff. Some years from now, someone who is both smart and an excellent writer will be able to look back and write a book that explains everything, but until then this stuff will be about as good as it gets. Details on "how to prevent" are even harder, and you'll probably have to look at the upcoming G20 summit in April where the Europeans will try to at least start talking about some kind of regulatory framework, while the Americans will just want everyone to throw more money at the same people that fucked things up.

anamax 18y ago
> One example: He spends a few sentences explaining how banks created CDOs: take some good loans, take some bad loans, put them together and using some math convince regulators and investors that these things are AAA rated. You write that like it's wrong or in error. As Google has demonstrated, you can create something that it is more reliable than its parts. A bundle of somewhat independent things has less variance than the pieces.
- petewarden 18y ago
  "somewhat independent" is the crux of the problem. In a crash the only things going up are the correlations. The modelling behind mortgage securities assumed that defaults were uncorrelated based on the short time period they based them on. Now we know better.
  - anamax 18y ago
    Misunderstanding correlations among defaults was part of it but the other big surprise was that different asset classes which less independent than thought. For example, no one expected an increase in mortage defaults to be accomplied by problems in stocks. In fact, its likely that these two things fed each other, that the unexpected correlation in defaults is at least partly due to the unforseen correlation across asset classes and the unforseen correlation across asset classes is at least partly due to the unexpected correlation in defaults.