I have to admit that the articles I linked to earlier are from Greg Mankiw's blog. Greg is a famous economist who has served on the President's Council of Economic Advisors and wrote the most commonly used intro to Econ textbook.
I found this article on NAFTA
http://www.american.com/archive/2008/march-02-08/doing-a-job-on-nafta
And this slide show is a GREAT explanation of what happened in the subprime markets. WARNING: it is PG13 for some strong language-i.e. Mom you should probably skip this one. If you look at one of the two, look at this. It is pretty funny.
http://docs.google.com/TeamPresent?docid=ddp4zq7n_0cdjsr4fn&skipauth=true&pli=1
January in Sabino Canyon
just before radiation started- on Jen's birthday
Sabino Canyon on hike
Part of the Catalina Mountains
the cavalry on the attack
2001 emerald city invite
9 comments:
Cool, I liked both! Thanks for posting them, I will probably use the 2nd one when I will teach again next Fall:-)
If anyone is interested to see how the market really values the mortgages, there is an index constructed by big banks that can be accessed here:
http://www.markit.com/information/products/category/indices/abx.html
The nominal price of the index is 100 and it means 0% probability of default. The closer it gets to 0 the more likely the mortgages will be worthless. BBB- mortgages are priced at around 10!! Even AAA mortgages issued in the second half of 2007 are priced at 53! There IS a price for the mess (it's not as much uncertainty as the media describes), it's just that the banks don;t want to admit it. And this is not the result of Bernanke or Bush freaking out about the possibility of a recession. The prices started to decrease dramatically in July last year, 3 weeks before the financial volatility of August when no official was mentioning the R word. At that time, BBB- were priced at around 50 whereas AAA were priced at around 90. Since than it just got considerably much worse....
You would think after Enron someone in the great CPA world would get a clue. But when a client pays you million$$, how can you be independent. Its like believing the $10 hooker really loves you.
Secondly, how many people could have stopped this mess? The homebuyer could have bought within his means. The mortgage company could have required actual earnings to support their loan payments. the whole idea of motgage backed securities could have been passed on. And the funds who bought the securities could have said no to unreasonable rates of return.
What's common at each level/ ---GREED. Enron, Keating, the saga just keeps getting repeated.
Hi Baby Doll,
Just got home from work and wanted to see how you are doing. I sure enjoyed yesterday. It was such a beautiful day, and wonderful company. I am hoping that I will be able to visit you guys again next week.
We do need to play a tie breaker in pinochle. Moochie and I are going to have to practice before we come back to visit.
Give Jen a big hug (I know I don't have to tell you that!)....anyway, love you forever.....
Aunt Lynnie
Hi Honey.....
I hope each day brings just the tiniest bit of strength back to you. I was wondering if all the ice cream in the freezer is gone yet....?????
I am still amazed that the radiation is still going strong in your body....it shouldn't be much longer, I pray.
Hope you all have lots of reading and family movie nights. It looked like you had enough movies for a good month or two.
Love to Jen and the whole family...I already wish I could see you in the nook reading....I can always see the picture on the blog, but it's not the same. I don't get to see you give a thumbs up or a smile, but I can picture it...
Love you forever....
Aunt Lynnie
Moke -
I finally watched the stick figur slide show on junk mortgages - very funny and instructive. Why don't they write textbooks like that ! I still always reach for Highlights in doctor's offices.
Well, old horse, everything's getting better - your treatment's over and Mar says you're looking lots better. Elz and Pat will be home in a few weeks, and there'll be a new baby in the family to welcome them, and don't forget the mexican food buffet (I love the word "buffet") with cerveza and margaritas cleverly timed for when you'll be eating like the old Moke.
See you soon. Love Greg
Hey Steven,
Enjoyed seeing you and Jen. I thought Jen looked so cute with her new hairdo and you with no hairdo. You will always look cute to me, even during the scoobie-van-scoobie days. I heard you had kinda a rough time after we left. I'm not so sure the evening walks are that good for you. Maybe in the daytime but the evening air is different. your mom wasn't feeling good yesterday but I haven't called her today. Lynn wants to go to Tucson this week, but isn't Jen's parents coming this week?
Stay strong. The pinochle games are even so the next is for all the money. You're gonna owe your life to me.
I love you.
Hey Steve,
Just wanted to say hi since it has been awhile. Super jealous that you and the dude hung out and I was not there. Besides that life is going pretty well. I will be back in the pacific northwest come the end of june early july. I have another week of vacation and I have not decided what to do with it, maybe Arizona? Let me know if you will be up to visitors at that time, or maybe we can meet in YACHATS.
Let me know
Robert
The English have a unique way of clarifying an otherwise difficult topic...
http://www.youtube.com/watch?v=SJ_qK4g6ntM
Good morning Steven. You don't know me but I recently met your Dad. He and I are serving as board members for the Gage Safer Streets Foundation. We had a meeting on our bikes during a Silent Sunday Event in South Mountain Park a couple weeks ago. I really enjoyed the ride and the opportunity to meet your Dad. He passed along your blog and I just spent a little time checking it out. Some really interesting stuff on the subprime market. I particularly got a kick out of the Subprime Primer posted by Adrian. It was hillarious and pretty informative too!
Just wanted to say hello and wish you all the best. I will remember you in my prayers.
Bill Brickey
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