Categories:
Finance: stocks, options, etc.
In this podcast, they get into a number of interesting issues regarding the financial crisis. Among the things that struck me was Nocera’s negative take on the bailout of Bear Stearns, which Nocera evidently thinks was not too big or too interconnected to fail.
As you know, I really liked the Nocera-McLean book. I think it is an important antidote to the view that the crisis was a short-term panic, rather than something that built up over many years due to hubris in Wall Street and Washington.
READER COMMENTS
Rob
Dec 20 2010 at 1:31pm
Arnold,
I recall your flattering review of the Nocera-McLean book. I’m recovering after my first semester of econ grad school and can’t wait to dip into some “financial crisis pornography”. I started with Lewis’ “The Big Short” and this one is next on my list. Give a shout out if you have any more suggestions.
Richard A.
Dec 20 2010 at 1:41pm
Here is an interesting article stating that the bailout of Goldman Sachs has been quite large.
ed
Dec 21 2010 at 12:18am
It was both.
It was short term in that in the fall of 2008 there was a real danger of a fear-induced domino effect where the major banks might not be able to meet short term obligations, even though most were basically solvent (as shown by their quick repayment of TARP loans.)
It was long term in the sense that there were large, real, long-term losses, mainly in securitized mortgage lending. That is the main reason all the banks are valued at a lot less than they were before the crisis, and bank shareholders have suffered huge losses.
(I think Arnold disagrees with this description, but I can’t figure out why or how.)
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