PointofLaw.com
 Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  
   
 
   

 

 

Holman Jenkins on myths of the financial crisis



Mortgage securitization wasn't just a way for Wall Street to fob off risk on naive investors; big firms on the Street loaded up on the unsound bonds for their own holdings. The designers of the new mortgage tools didn't think housing prices could only go up. Executive compensation practices weren't just a "heads we win, tails you lose" game. And more [Hoover Policy Review via Business Insider]

More: In an energetic response, Felix Salmon says "Jenkins's attempts to let Wall Street off lightly simply don't hold water"; Wall Street firms never expected to eat as much of their own dog food as they wound up having to, the structure of securitization discouraged fundamental analysis of what widespread defaults would do, and the perversities of compensation are not limited to problems of inadequate "skin in the game" (or to executives as such, given the central role of traders).

Related Entries:

 

 


Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.