Max,
I tried to send a response a little while ago but it is in the ether
but not on Pen-l. Here is a recreation:
I found this paper helpful.
Lessons from the Subprime Meltdown
by
L. Randall Wray*
Senior Scholar, The Levy Economics Institute, and
Professor, University of Missouri—Kansas City
December 2007
ABSTRACT
This paper uses Hyman P. Minsky’s approach to analyze the current
international
financial crisis that was initiated by problems in the U.S. real
estate market. In a 1987
manuscript, Minsky had already recognized the importance of the trend
toward
securitization of home mortgages. This paper identifies the causes and
consequences of
the financial innovations that created the real estate boom and bust.
It examines the role
played by each of the key players—including brokers, appraisers,
borrowers, securitizers,
insurers, and regulators—in creating the crisis. Finally, it proposes
short-run solutions to
the current crisis, as well as longer-run policy to prevent “it” (a
debt deflation) from
happening again.
Keywords: Hyman Minsky; Financial Instability; Mortgage-backed
Securities; Subprime
Mortgages
JEL Classifications: E12, E32, E44, E58, E63
Full at www.levy.org/pubs/wp_522.pdf
On Jan 30, 2008, at 5:47 PM, Max B. Sawicky wrote:
Maybe it's time to read Minsky.
To nobody in particular, any suggestions on that front?
By these rate cuts at a time of high and rising inflation the fed is
sending a four word message: ITS TIME TO PANIC.
