On Jan 12, 2008, at 11:27 PM, Michael Pollak wrote:
> They also have a nice quip in the conclusion, that the run-up to the
> post-subprime banking crisis looks a lot like the petro-dollar
> recycling
> boom of the late 70s that led to the third-world debt banking
> crisis of
> the early 80s. The only difference is that this time we recycled the
> money to a developing country in the US, namely the subprime
> borrowers.
> But the effect on the banks was the same.
This looks like an interesting paper, though I've only scanned it - I don't get what Patrick was exercised about. More tomorrow.
"The effect on the banks was the same": last time, big writeoffs/ losses, a state bailout, and a profit boom. This time the state seems to be not Washington but Beijing and Abu Dhabi.
Doug