Regulatory Capture — Exhibit A Goldman Sachs made out on the housing bubble twice: it f—ed the investors who bought their horsesh-t CDO’s by betting against its own crappy products, then it turned around and f—ed the taxpayer by making him pay off those same bets. –Matt Taibbi, “The Great American Bubble Machine”; Rolling Stone...Read More
Adjustable Rate Mortgages the Missing Link What about Greenspan’s argument that he only controlled short-term rates? And that short rates became decoupled from long-term rates in 2002? Nonsense, says [Stanford Professor John] Taylor. Surely the existence of adjustable-rate mortgages (accounting for about one-third of mortgages starting in 2003) linked the mortgage market and short-term rates....Read More
Memorable Quotes from Berkshire’s ’09 Annual Letter In 75% of [the last 44 years], the S&P stocks recorded a gain. I would guess that a roughly similar percentage of years will be positive in the next 44. But neither Charlie Munger, my partner in running Berkshire, nor I can predict the winning and losing years...Read More
