tag:blogger.com,1999:blog-6616959642391988608.post9004862462296766015..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Fama on the financial crisis and "credit bubbles"Scott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-6616959642391988608.post-22426159109244583992018-09-07T00:25:59.494-07:002018-09-07T00:25:59.494-07:00This comment has been removed by a blog administrator.Adelehttps://www.blogger.com/profile/14145246070292023657noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-1360910512357530102010-01-24T18:01:56.400-08:002010-01-24T18:01:56.400-08:00lb100: I use a combination of active and passive i...lb100: I use a combination of active and passive investment strategies. I hold some major positions in index funds, and I hold outsized positions in companies that I follow very closely and feel very strongly about. <br /><br />I'm always looking for situations in which the market tells me that the outlook for the future is very different from my own outlook. I believe the market can and doesScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-56536206021907087212010-01-22T15:11:48.040-08:002010-01-22T15:11:48.040-08:00Scott,
Thanks for the post and the link to the Fa...Scott,<br /><br />Thanks for the post and the link to the Fama interview. The reference to the efficient market hypothesis, however, raised a question I've had for some time about your investing philosophy and approach. Perhaps I've misunderstood, but it seems that your approach is to use cues from the various bond, money, and commodity markets as guides to the strength and direction oflb100https://www.blogger.com/profile/12982706469476724785noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-70573192799890329452010-01-22T08:35:45.295-08:002010-01-22T08:35:45.295-08:00rgraute: M2 data is available from the Federal Res...rgraute: M2 data is available from the Federal Reserve:<br /><br />http://www.federalreserve.gov/releases/h6/hist/<br /><br />GDP data is available here:<br /><br />http://www.bea.gov/national/index.htm#gdpScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-38207094925582029922010-01-22T08:33:13.965-08:002010-01-22T08:33:13.965-08:00WEH: John Taylor would be my choice to replace Ber...WEH: John Taylor would be my choice to replace Bernanke.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-87703917590268112042010-01-22T06:55:47.509-08:002010-01-22T06:55:47.509-08:00Dear Scott,
thank you very much for your daily ec...Dear Scott,<br /><br />thank you very much for your daily economics lectures! They are great fun to study and it is a big honor that you share your knowledge with us. Please keep up the good work.<br /><br />Could please let me know where you got the M2 data from which you calculated the 1% figure?<br /><br />Many thanks in advance and have a great weekend!<br /><br />Ralf from GermanyRalf Grautehttps://www.blogger.com/profile/13512810458016851763noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-65137550284648735482010-01-21T23:04:05.957-08:002010-01-21T23:04:05.957-08:00Mr. Grannis:
John B. Taylor’s book Getting Off Tr...Mr. Grannis:<br /><br />John B. Taylor’s book Getting Off Track explains it nicely. In 100 pages Taylor clearly spells it out. Taylor makes a good point that cheap money set the stage for all the other activities that followed. That is, all the financial activities that occurred that are referred to as the components of “the financial crisis” can be traced back to 2002-2004 creation of cheap W.E. Heasleyhttps://www.blogger.com/profile/00368333904571061995noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-84446911398257794042010-01-21T19:02:39.469-08:002010-01-21T19:02:39.469-08:00The whole subprime mortgage story is very complex....The whole subprime mortgage story is very complex. When I was at Wamco back in 2005-2007 we talked a lot about the risk to mortgages of a decline in home prices. I even asserted at the time that prices could fall 30-35%. We were aware of the risks, and so we didn't buy mortgages that weren't AAA+, and that we thought could withstand a 30% price decline. What we didn't know or realize Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-50017165899625251912010-01-21T17:30:22.624-08:002010-01-21T17:30:22.624-08:00Scott,
I agree that the govt. was a big culprit i...Scott,<br /><br />I agree that the govt. was a big culprit in the financial crisis, but as another of these posts points out, no one forced the private banks to leverage the MBSs 30:1. When housing prices started to fall, there were runs on these banks because of the perception that they didn't have enough capital to pay back their debt. I suppose from a free-market perspective it would Billhttps://www.blogger.com/profile/06910619601367464068noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-18428056988400910942010-01-21T16:57:15.178-08:002010-01-21T16:57:15.178-08:00Not sure about Fama's statement to the very go...Not sure about Fama's statement to the very good New Yorker writer.<br />After all, two-thirds of home loans were re-purchased as MBS by private buyers--after getting ace ratings from Moodys, Fitch, S&P et al. The private buyers bought purely of their own volition. It was a free market. Lenders knew they could re-sell loans, so they kept lending.<br />The credit rating agencies are paidBenjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-27939078458043800322010-01-21T15:21:46.960-08:002010-01-21T15:21:46.960-08:00Very good post. The blame squarely lands on the sh...Very good post. The blame squarely lands on the shoulders of government and in particular the Fed. <br /><br />The irony is the complete denial by Bernanke, Greenspan, and Geithner of their part in the calamity.<br /><br />The reality is, even if congress mandates more households should own property via FHA, FNMA, or GNMA, there isn't a problem until rates get so low that every Tom, Dick, andPublic Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.com