Professor Mark J. Perry's Blog for Economics and Finance
Reason.tv: John B. Taylor, professor of economics at Stanford University, challenges the conventional wisdom that it was an excess of deregulation that precipitated our current financial crisis. In fact, he says, the exact opposite is true.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
5 Comments:
I figured the quote I left up above would be good for this post too:
I'm sorry Mark but this is just flat out wrong.
I have commented about this many times, but I recently saw a quote from Chuck Prince, former CEO of Citi, that summed up the cause of the crisis in a nutshell.
When asked why he didn't get out of MBSs early and wasn't it obvious to him what type of major bubble housing was, he didn't blame regulators, bureaucrats, the CRA, Fannie or Freddie. He said:
"When the music is playing, you have got to dance"
This sums up finance perfectly. It is just a game of chasing returns. Oh, I am sure on an individual level some good analysis is being done, but on the aggregate money chases returns. This is how bubbles form.
There was a survey of commodities traders who were asked why did they all pile into oil last year. Was it their fundamental analysis? Was it the long term fundamentals of the diminishing supply of oil?
No. They put their money into oil because it was going up. Its as simple as that.
And that's why unregulated finance is prone to bubbles.
Q: Do you know the best way to sell a book?
A: Challenge conventional wisdom no matter how unfounded or stupid it may seem to do so.
See Also, Bill O'Reilly
"I'm sorry Mark but this is just flat out wrong"...
Gee! Now I know where I've that silliness before: Quote of the Day posting...
Apparently mach you either didn't watch the clip or understand the clip...
Gee! I wonder what explanation you'll offer mach for the job losses that will occur when the federal government steps into the manufacturing business even harder?
Why is this past tense? The government's changing rules every week is prolonging the crisis. Or did I miss the end of the crisis?
I figured the quote I left up above would be good for this post too
Proving that your ignorance is as entrenched as Barney Frank.
Post a Comment
<< Home