The BIG sin of modern economic thinking is the idea that we can have compound growth in a finite biosphere. Why even sweet little old ladies expect their investments to pay 7% compounded. In fact, only expecting 7% is considered a sign of greedless fiscal responsibility. Yet it is perfectly obvious that if the real economy only grows by 3% in a good year, anyone who expects 7% is either a fool or a crook. And yet, folks in the banking business who would "settle" for a realistic rate of interest like 3% would lose their jobs VERY quickly.
Now we know the truth. The financial meltdown wasn't a mistake – it was a con
The Observer, Sunday 18 April 2010
Hiding behind the complexities of our financial system, banks and other institutions are being accused of fraud and deception, with Goldman Sachs just the latest in the spotlight. more
Michael Lewis's Complete Guide To Who's Who In The CDO Scandal
Courtney Comstock | Apr. 16, 2010, 12:17 PM
The huge SEC case against Goldman and Fabrice Tourre has brought the spotlight back on the mortgage crisis.
Tourre allegedly packaged CDOs filled with very risky mortgage bonds and then marketed them to investors by telling them that Paulson was also long them. He wasn't.
Michael Lewis's book, The Big Short, explains very well what happened during the crisis - who was long, who was short, and how they did it.
Take a quick refresher to remind yourself what exactly happened and you'll better understand the charges against Tourre. moreAnd Taibbi on Bloomberg TV.