One reason the effect of the US subprime loan crisis has spread so far and so quickly is that financial institutions have many ways of participating in the debt market other than issuing or buying debt instruments. Most of the financial news I have read omits explanations of how it happens, other than generic references to “derivatives.” Here are some of the other ways to have a loss without touching a mortgage.
Mitch Townsend
Quote of the Day
“We have not released giant badgers in Basra, and nor have we been collecting eggs and releasing serpents into the Shatt al-Arab river,” Major David Gell told reporters.
Cue the Monty Python references.
Ribbit Redux
The Dissident Frogman is back!
Quote of the Day
Reductio ad absurdum done right.
The Upside of Income Inequality
By Gary S. Becker and Kevin M. Murphy
From the May/June 2007 Issue of American.com
For many, the solution to an increase in inequality is to make the tax structure more progressive—raise taxes on high-income households and reduce taxes on low-income households. While this may sound sensible, it is not. Would these same indi viduals advocate a tax on going to college and a subsidy for dropping out of high school in response to the increased importance of education? We think not. Yet shifting the tax structure has exactly this effect.
Memo to John Edwards
“But what this global war on terror bumper sticker — political slogan, that’s all it is, all it’s ever been — was intended to do was for George Bush to use it to justify everything he does: the ongoing war in Iraq, Guantanamo, Abu Ghraib, spying on Americans, torture.” — John Edwards, June 3, 2007