- Ranieri
- Clinton
- Greenspan
- Bernanke
- Paulson
If you don't know who Ranieri is, go here. Mundell dings Ranieri for having "lost connection between original borrowers and lenders" which seems dead on to me: the reason we can't do workouts is that nobody knows who owns this stuff.
He blames Clinton for repealing Glass-Steagall which is a fair cop, although I'd say others are more culpable (I'm looking at you, little Phil Gramm). He also blames Clinton for "strengthening the 1977 Community Reinvestment Act," and I don't think we have enough data on that one yet. Way I see it, most of the problem loans came from lenders not covered by CRA, and lots of CRA borrowers have continued to perform well. But we need to know more.
The rap on Bernanke is not quite what you might guess: mainly that he let the dollar soar in 2008 which (per Mundell) triggered the credit crunch (so also PaulsOn).
BTW on close scrutiny, I see his five goats are really six: he also has a slide for Maurice "Hank" Greenberg, who gave us AIG.
H/T: Dani Rodrik. Not sure my link to Mundell will work; if not, follow the link from Rodrik's page.
1 comment:
Holy cow! Lew Ranieri has lost weight since, oh, 1984-ish when he was a very chubby advertising client of mine at a truly terrible advertising agency called Doremus.
You gotta love financial guys. They take out (or at least used to take out) full page ads in the Wall Street Journal and NY Times to tell you that their you-know-what is bigger than your you-know-what.
In Ranieri's case, the assignment was to write an ad about CMOs — consolidated mortgage obligations — to let the world know they he invented them, not some guys at First Boston, which was also taking credit for the invention.There was no commercial purpose for the advertising other than that. It was purely about financial penis measurement.
We had to meet for a briefing at 7-something in the effin' morning. (Once the market opened, the guys at Salomon didn't have time to brief ad guys.)
The ads never mentioned Lew's name. But they clearly stated that it was Salomon — and by implication, therefor not First Boston — that did the first CMO, years earlier. How did Lew get credit? Everyone who mattered to Lew knew he ran the CMO business at Solly.
Ranieri was there with his whole group, which included a skeptical looking kid who said nothing, just listened. He was Michael Lewis.
Anyway, because I helped make CMOs a testosterone vehicle, I guess, in an oblique kind of way, the mortgage meltdown is MY fault.
Where's my bonus?
Yours crankily,
The New York Crannk
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