December, 2008

I Am Not Now, nor Have I Ever Been, a Monkey Psychologist

by Lawrence H. White
The Conversation
December 16th, 2008

In response to my observation that he had put little emphasis on the real estate and other malinvestments that kicked off our financial turmoil, Bradford DeLong writes:
That there are “malinvestments… wealth-squandering mistakes” … is simply not news.
I understand that Professor DeLong’s main interest lies elsewhere, in the question of what has made the global decline [...]

Read: I Am Not Now, nor Have I Ever Been, a Monkey Psychologist

Reader Contribution: A Worm’s-Eye View from Wall Street

A Cato Unbound reader who works on Wall Street (and has asked to remain anonymous) sent us this detailed essay offering a professional “worm’s-eye” perspective on the financial crisis. The essay add to this month’s issue by exploring some of the complex mechanisms behind the “acid decay of trust” the author contends caused Wall Street’s meltdown.

Read: Reader Contribution: A Worm’s-Eye View from Wall Street

Financial Accelerator vs. Monkey Psychology

by J. Bradford DeLong
The Conversation
December 16th, 2008

Lawrence White writes:
Professor DeLong says little to emphasize the cluster of malinvestments, the rafts of investment projects — particularly in real estate — that have turned out to be wealth-squandering mistakes, leading to the writing down of financial claims that funded them…
I protest.
White misses my point. We have, at most, $2T of losses in securities [...]

Read: Financial Accelerator vs. Monkey Psychology