Barry "Big Picture" Ritholtz:

How on Earth was a strawberry-picker in California making $15,000 a year able to qualify for a no money down loan on a $720,000 mortgage? That is just unconscionable.

Housing prices might not fall all at once, though -- they can just go sideways for twelve years and that's the inflation-adjusted equivalent of a 20 percent drop.

It was so obvious it was going to fall apart eventually. What is so amazing is how long it took to actually happen.

From James Suroweicki in early November:

The havoc on Wall Street following the collapse of the subprime-mortgage market boils down to a simple truth: for years, lots of very smart people took lots of very foolish risks, betting borrowed billions on dubious mortgage derivatives, and eventually the odds caught up with them. But behind that simple truth is a more surprising one: the financial whizzes made bad decisions in part because that’s what they were paid to do.

One lesson of the current market chaos, then, is that it’s hard to get incentives right.

From 159 years ago, on incentives:

It hits the poor, not because it wants to hurt them, but to frighten the rich ...

From a Financial Times op-ed by Lawrence Summers, in a popular thread from late November:

Without stronger policy responses than have been observed to date, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond.

Don't Fear the Bear

Three short videos from the Daily Show and the Colbert Report on the economic crisis.

The Big Picture | Comedy Central on The Economy

On Friday, a deeply divided House rebuffed President Bush's demand for retroactive immunity, then defiantly left Washington for a two-week spring break.

Republicans said the secret session proved to be deflating, not because of the quality of the evidence, but because of Democrats' unwillingness to listen.

A few from the archive:

Lisa: "Can't you see the difference between earning something honestly and getting it by fraud?"

Bart: Hmm, I suppose, maybe, if, uh ... no. No, sorry, I thought I had it there for a second."

To be sure, time marches on.

Yet for many Californians, the looming demise of the "time lady," as she's come to be known, marks the end of a more genteel era, when we all had time to share.

Perhaps the most powerful way in which we conspire against ourselves is the simple fact that we have jobs. We are willingly part of a world designed for the convenience of what Shakespeare called “the visible God”: money. When I say we have jobs, I mean that we find in them our home, our sense of being grounded in the world, grounded in a vast social and economic order. It is a spectacularly complex, even breathtaking, order, and it has two enormous and related problems. First, it seems to be largely responsible for the destruction of the natural world. Second, it has the strong tendency to reduce the human beings inhabiting it to two functions, working and consuming. It tends to hollow us out.

Defiant, House Heads to Havasu

James T. Walsh was one Republican who questioned the value of the session. “What we heard was marginally classified,” he said. “The really secret stuff, we couldn’t talk about.”

“We saved him,” one said. “He probably would have been disciplined.”

From the headlines:

They discussed his reputation as a "difficult" man who sometimes asked "to do things you might not think were safe."

"I mean, it’s just kind of like ... whatever ... I’m here for a purpose. I know what my purpose is. I am not a ... moron, you know what I mean."

From the archive:

Is more what we really need?

In my opinion not.

But more listening is what the NSA knows how to organize, more is what Congress is ready to support and fund, more is what the President wants, and more is what we are going to get.

To be disciplined is to follow in a good way. To be self-disciplined is to follow in a better way.

Outsiders sometimes find it tempting to dismiss such wheel-spinning as bureaucratic silliness, but I believe that the Judiciary Committee will find, if it is willing to persist, that within the large pointless program there exists a small, sharply focused program that delivers something the White House really wants. This it will never confess willingly.

Secret session 'was a total waste of time', says Congressman

Living a good life requires a kind of balance, a bit of quiet. There are questions about the limits of the brain and the body, and there are parallels here to the environmental movement.

Who would say you don’t need time to think, to reflect, to be successful and productive?

I believe that there has to be a way to regularly impose some thoughtfulness, or at least calm, into modern life. Once I moved beyond the fear of being unavailable and what it might cost me, ... I felt connected to myself rather than my computer. I had time to think, and distance from normal demands. I got to stop.

From the archive:

All we need to do is remember that reading, in order to allow reflection, requires slowness, depth and context.

To be sure, time marches on.

Yet for many Californians, the looming demise of the "time lady," as she's come to be known, marks the end of a more genteel era, when we all had time to share.

Perhaps the most powerful way in which we conspire against ourselves is the simple fact that we have jobs.

Although my grandmother has seen a lot of it, she never liked change much. "The things you see when you don't have a gun" was a favorite expression, delivered on encountering any novelty or irritant.

I Need a Virtual Break. No, Really.

Support from studios has been widely cited as the reason for Blu-ray's victory, but few consumers know that the studios were likely won over by the presence of a digital lock on movies called BD+, a far more sophisticated and resilient digital rights management, or DRM, system than that offered by HD DVD.

This is very interesting.

How Crypto Won the DVD War | Threat Level from Wired.com

It's McCain!

Diebold Accidentally Leaks Results Of 2008 Election Early

The rescue operation brings to mind John Kenneth Galbraith's dictum that in the United States, the only respectable form of socialism is socialism for the rich.

Massive Bailout Planned for Banks

MemeStreams: It's just like having real friends!

The same voices that supported tough macroeconomic policies to deal with the excesses of spending and borrowing in east Asia, Russia and Latin America are today pushing for a significant relaxation in the US to deal with the so-called subprime crisis...

Main Street consumers have overspent and over-borrowed and are unable to meet their obligations...

Consumption has been above sustainable levels and needs to adjust down, whatever view one has about the responsibility of adults over their financial decisions.

The adjustment of private consumption to sustainable levels is necessary, but is likely to have a negative influence in the short run on the growth of aggregate demand... put downward pressure on world growth.

Sustainable growth is not the consequence of an unsustain­able consumption boom but of the progress and diffusion of science, technology and innovation...

An efficient adjustment to the US over-consumption imbalance (and Chin­ese under-consumption) in a way that does not hurt longer-term growth should be based on compensating for the decline of US consumption with an increase in domestic investment and in consumption abroad. It should not be based on giving the US consumer more rope with which to hang himself... giving US households a $1,000 cheque by April, a trick that no macro­economic textbook would argue is particularly effective...

This essay is extremely clear and paints a stark picture.

Many of these points were made elsewhere earlier in the week:

The current slowdown is layered on top of deep-rooted economic problems that are not addressed by a stimulus package. If the nation’s leaders do not start showing the political will to do more than dole out popular tax breaks during an election year, short-term fixes could actually make the long-term problems worse.

For all its power, the Fed cannot change this troubling fact: trust in much of the financial system -- banks, brokerage houses, ratings agencies, bond insurers, regulators -- has been severely damaged by the subprime mortgage crisis. And that damage cannot be reversed with a quick cut in interest rates.

Stop behaving as whiner of first resort