Misunderstanding Credit and Housing Crises: Blaming the CRA, GSEs #10YEARSAGO ritholtz.com/2008/10/misund…
Vitus Capital
Replying to @ritholtz
A GREAT new screed about the crisis! Causes, motivations, etc. This should be made into a book! Wait... One big thing - which is hard to discuss - is the factor of the structure of the debt. EG, the first big CDO championed by Blythe Masters at JPM /1
Replying to @ibilln @ritholtz
...started out not matching it's performance profile. IE, beating your model of piles of disparate financial vehicles into something that fails along a Bell curve is, um, hard. In fact, CDO's in general never worked. The -substance- of the crises was that shadow banks 2/
Replying to @ibilln @ritholtz
and regular banks were caught in a downdraft in 2007 when they all, knowing what kind of assets they all had, stopped short-term (repo) loans to each other. More bluntly, they knew that they all were a blink away from insolvency All due to misunderstanding normal distributions/3
great post, really nice
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