Then again, maybe the S.E.C. is trying to cover up its own culpability in this crisis. Four years ago, the agency pushed through a rule that allowed the big investment banks to take on a great deal more debt. As a result, debt ratios rose from about 12 to 1 to more like 30 to 1. Guess what Lehman’s debt ratio was when it went bust? Yep: 30 to 1.
- Joe Nocera, NYT
Arun, thanks for posting a link to
ReplyDeleteThe Subprime Primer
over on Peter Woit's blog.
In light of a couple of things that happened since February 2008, when The Subprime Primer appeared on google,
I added an alternate ending and put it on the web at
tony5m17h.net/SubprimeShanghai.pdf
and
tony5m17h.net/Subprime5hanghai.mov
The first is a 3.4 MB pdf file and the second is a 1.9 MB mov file.
The post-February 2008 events were:
1 - A 23 March 2008 New York Time web article by Nelson D. Schwartz and Julie Creswell said, about Credit Default Swap Derivatives:
"... Today, the outstanding value of the swaps stands at more than $45.5 trillion,
up from $900 billion in 2001. ...".
2 - Joseph Coleman, in a 6 June 2008 AP news article about an International Energy Agency (IEA) report, said:
“...The world needs to invest $45 trillion in energy
in coming decades, build some 1,400 nuclear
power plants ... in order to halve greenhouse gas emissions by 2050 ....”.
3 - A Reuters web article on 17 Sep 2008 said:
"... the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said ...".
Tony Smith