Few things gladden my heart like opening my morning paper (the Washington Post), or any periodical for that matter, and seeing my brother’s name. This has happened more than once. And it’s up to me to find it; I get no advance warning from the source.
In “American Capitalism Besieged,” columnist Robert Samuelson quotes Richard Tedlow (the brother in question) on the fate of Richard Whitney, who was head of the New York Stock Exchange in 1928. Richard Tedlow has focused on business history for most of his professional life; he is currently the MBA Class of 1949 Professor of Business Administration at Harvard Business School.
Richard Cohen asks this and other cogent questions in today’s Washington Post. My guess is that “Lady Subprime,” is destined for classic status. Here is the piece in the Wall Street Journal on which Cohen has based his own observations.
The banking/finance/credit/housing and mortgage crisis – and those with the wit and skill to explain it (or at least, try to)
This will be a very brief post.
And yes, you are on Books to the Ceiling, where Your Faithful Blogger tries to stay within the lofty precincts of high culture – and not get down and dirty with the money men (and women – though there don’t seem to be quite as many of our sex being named in recent news coverage).
The Washington Post and The New York Times have recently run some excellent stories on various aspects of the implosion with which we are all now so lamentably familiar. I have read these and other dispatches from the financial front as diligently as possible. I’m getting a general understanding of what has gone so drastically wrong. But as with so many things, the devil, alas, is in the details. As soon as I encounter phrases like “credit default swap” and “collateralized debt obligation,” a dense metaphorical fog descends and envelopes my brain. I have reached, at that point, the limits of my understanding.
This is from “Printing Money and Its Price” by Peter S. Goodman, an article that appeared in this past Sunday’s New York Times:
“For decades, businesses and consumers feasted relentlessly, as if gravity, arithmetic and the tyranny of debt had been defanged by financial engineering.
I may not understand most of the intricacies, but I’m grateful for those who do – especially those whose forceful prose is this good. “Defanged” is such a terrific word, right there, in the exact right place.
I’ve looked at two books on the subject of the current crisis. They’ve been well reviewed, and are doubtless well written and conscientiously researched – but both proved too daunting for me to tackle, at least at the present time:
I have reserved three others that look similarly intriguing:
Here’s Daniel Gross, in a review of Panic in this past Sunday’s New York Times: “A single entry of the Irvine Housing Blog, which shows how a person in January 2005 bought a $1.157 million house with $270 down, refinanced with a funky teaser-rate mortgage and then proceeded to open up a $491,000 home equity line of credit by 2007, neatly encapsulates the lunacy.” Yes, I checked – all of the decimal points are correctly placed!
Also appearing in the Sunday December 28 issue of the Times “Saying Yes to Anyone, WaMu Built an Empire on Shaky Loans,” by Peter S. Goodman and Gretchen Morgenson. “WaMu” is Washington Mutual, and you don’t need a degree in finance to be appalled by what was going on in recent years in that institution’s mortgage processing center:
“‘It was the Wild West,’ said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. ‘If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.’
Finally, on this brisk New Year’s Day of 2009, this headline greeted me in the Post: “Wall Street’s Final ’08 Toll: $6.9 Trillion Wiped Out.”
Happy New Year – I think, I hope…