http://www.minyanville.com/articles/.../index/a/23157
Very well worth the read, Silver buffs will love the second page
1) What Really Caused the Debt Crisis
Yesterday I ran across a recent interview with the Financial Times' Gillian Tett which appeared in Newsweek. Tett has a new book out that looks interesting, "Fool's Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe."
In the interview, Tett was asked, Once things started to go bad, there were a lot of mistakes made by managers but also by policymakers on both sides of the Atlantic. What, in your mind, were some of the crucial ones?
"One of the biggest policy mistakes was made by the American officials who repeatedly said that the subprime problem was contained and that there was no reason to worry about it at all. That represented a considerable misunderstanding of how the financial system had changed. They failed to calculate the enormous quantity of derivatives written … nobody knew how big they were."
Her response leads to a point I've been trying to make in Five Things with respect to Socionomics and herding behavior. Consider this point: "one of the biggest policy mistakes was made by the American officials who repeatedly said that the subprime problem was contained and that there was no reason to worry about it at all." Well, that's not really a policy mistake so much as an observational mistake
