'Regulation-induced Innovation': The Role of the Central Bank in the Subprime Crisis
My favorite paragraph:
Regulators and others mistakenly focus on maintaining market liquidity, he noted, citing John Maynard Keynes: "There is no such thing as liquidity of investment for the community as a whole. The social object of skilled investment ... is to outwit the crowd, and to pass the bad, or depreciating half-crown to the other fellow." In the cases of the current subprime crisis and the 1980s savings-and-loan mess, the "other fellow includes the taxpayer," Kane said, "and that's what pisses me off."
More commentary to come on Fannie/Freddie, Bernanke (and what an idiot he is), etc.
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