Watching the on-going meltdown in the sub-prime mortgage market, which is triggering a sharp tightening of underwriting standards to these dicey credits, I was reminded of prescient writings by two serious thinkers: Bill Gross and Hyman Minsky. Both narratives go back a long ways, with something that Bill wrote in August 1980 – 27 years ago! – particularly poignant:
Related book: Stabilizing an Unstable Economy
“Minsky Crisis” – by L. Randall Wray
“Securitization” – by Hyman P. Minsky
“What Do Banks Do? What Should Banks Do?” – by L. Randall Wray
Related link: Simoleon Sense: Hyman Minsky Megapost!