Is Financial Regulation Overhaul Stumbling? And Can the Fed Remain 'the Fed' After the Overhaul?

(Update: In other news out of Washington DC today, my sixteen year old daughter got her driver's license this morning, in a road test that she herself described as "weirdly easy" and which Dad will rephrase as "alarmingly" so.)

"Overhaul Stumbles" is how the headline the Wall Street Journal put things this morning in its account of a high level meeting of Treasury Secretary with other top financial regulation officials, including Fed chief Bernanke, SEC Chairman Schapiro, and FDIC head Sheila Bair: "Geithner Vents as Overhaul Stumbles." (WSJ, Tuesday, Aug. 4, 2009.) According to the article:

Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration's faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.

The proposed regulatory revamp is one of President Barack Obama's top domestic priorities. But since it was unveiled in June, the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf.

Mr. Geithner told the regulators Friday that "enough is enough," said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.

What's the pushback about? Turf battles among agencies, according to the article. Put substantively, Bair and Schapiro both object to the Administration's plan to vest so much of the authority for dealing with financial crises, under the doctrine of safeguarding against systemic risk, in the Fed:

Ms. Schapiro and Ms. Bair, among others, have argued that more authority should be shared among a council of regulators.

"You are talking about tremendous regulatory power being invested in whatever this entity is going to be," Ms. Bair told the Senate Banking Committee last month. "And I think, in terms of checks and balances, it's also helpful to have multiple views being expressed and coming to a consensus."

Officials from the Federal Reserve and the Office of the Comptroller of the Currency, meanwhile, have questioned the creation of a new federal agency to oversee consumer regulations, a move that would take away powers from both institutions.

But the article makes reasonably clear that, despite the agency battles over who gets or does what, the legislative actions on the various piece of the reform plan will mostly - not completely by any means, but mostly - take place. As has been noted, industry groups have gotten active in lobbying on this or that, threatening to kill the Administration's overall proposal by a thousand small cuts, but my impression is that at least at this stage, the Administration's basic plan is on-track legislatively. (I put up an earlier post about the Treasury plan and its views on global financial regulation reform; I will try to put up some other posts going to particular parts of the Treasury proposal - and if I'm lucky, get them up before anything happens legislatively (!))

An important question is raised by the Administration's plan to place so much of the power for addressing systemic risk in the Fed, and it does not appear to me to have been extensively discussed, at least not in the terms I suggest here. The question is whether the Fed, so empowered with all these new functions and duties and powers and authority, can remain the Fed. Will the Fed remain the Fed?

(This is leaving aside the other huge policy presumptions of the Administration's proposals, starting with acceptance of certain institutions as too big to fail and attendant moral hazard.)

A principal reason why the Administration's plan proposes to use the Fed is that it has enormous latent powers to act and legitimacy to do so. But its ability so to act depends upon a peculiar expression of legitimacy in a democratic system - its reputation for being above day-to-day politics while still taking the most profoundly political actions conceivable (the issuance of fiat money). Its relationship to Congress is one of reporting and expressing all the properly democratic sentiments of obeisance to the crowd of nitwits, blowhards, and self-dealers who have managed to entrench themselves as rent-extractors on the dividing line of public and private; but who, for all that, are the People's Representatives (God save us all) in our extended exercise in democratic self-government.

The system for its legitimacy depends upon exquisite attention to the forms of democratic obeisance while taking actions that will almost certainly cause pain to many of those democrats' cherished constituents, in the larger cause of managing the currency and the banking system. Our democracy depends in many respects upon establishing institutions that we empower to inflict short term pain in pursuit of our collective long term interests. Institutions that sit uneasily in a fully democratic system because they are, in one sense, a complement to it, but in another sense something close to a rebuke. Above all it is a question of legitimacy. The Fed cannot ground its legitimacy solely in its technocratic expertise, because that is finally incompatible with democracy; it cannot ground its legitimacy in purely democratic exercises, because its exercises of power are constructed by a democratic system to be, in its most profound actions, taken on the basis of expertise, not popular democratic will in the ordinary sense.

The peculiar mixture of legitimacy is a little like bait and switch, but deliberately designed to be that way. uggest that the Fed should do 'x' because it is the will of the Congress, and it will do whatever it does asserting that it acts from its expertise. Suggest that the Fed should do 'y' because that is the expert thing to do, and it will do whatever it does asserting that, after all, it is a democratically accountable institution with a governing statute and specific limited power, despite their discretionary nature. That's what gives it the ability to act with legitimacy. But it is a delicately balanced form of legitimacy that sits far more uneasily as a matter of both politics and democratic political theory than it might appear. It is a source of legitimacy that is far more easily upset and destabilized than we think; we take the Fed's vaunted 'independence' - even understanding that as a highly nuanced, complicated, ad hoc, shifting balance of power than it first appears - quite possibly far too much for granted.

Arguably the Treasury plan takes the permanency of the Fed's legitimacy far more for granted than it should. Very little in the new grant of power or authority to the Fed takes account of the idea that, for example, a Fed that is supposed to supervise, scrutinize, divinize, and so on, in all these new ways will not the same Fed, the stable ideal of which we relied upon in giving it all these new functions. To the contrary, giving it these new functions shifts the balance of legitimacy - surely in the minds of Congress, to start with - toward the idea that the institution is and ought to be far more politically accountable in the day to day to Congress than it is now. Even a shift in the expectation has an important possibility in shifting, and undermining, the Fed's legitimacy - and yet it was precisely that legitimacy which was the attraction of putting all these functions onto the Fed in the first place. Time will tell how new functions will alter the political nature of the Fed, and its balance of power with Congress. And most of all its legitimacy to be able to inflict short term, severe pain (think Volker in the early 1980s) in the interests of the long term good.

This is not necessarily a reason not to go down this path. No doubt this very question - it is not un-obvious, after all - has been extensively discussed in formulating the Treasury plan, and the failure to raise it a deliberate one (if a mistake, in my view). But there is good reason to wonder whether the ideal of the Fed on which we place so many new duties can be, in virtue of those new duties, the old Fed. Are we asking to have our cake and eat it too?

(Note: Several years ago, Yale constitutional law scholar Jed Rubenfeld published a short book on time horizons in a democracy, on Jefferson's views on whether the dead hand of the past should be able to bind the future, Freedom and Time (2001). When I read it, I thought it an extraordinarily smart and profound take on a topic that, however, seemed to me then an almost wholly abstract jurisprudential proposition. I've since changed my mind completely, and re-read the book; it's a book whose argument deserves a close re-consideration in our present circumstances. There's a very important connection to be made between the arguments in that book, and consideration of the relationship of a democracy to ... long term credit markets and ethical and legal considerations in making decisions what burdens to impose or not impose upon future generations. I would be curious whether Jed has had any thoughts on the application of those arguments from almost a decade ago to today's circumstances.)

PatHMV (mail) (www):
In my own state of Louisiana, government has a long history of putting programs or regulatory powers in whatever institution currently has the most perceived public legitimacy and integrity, with little regard to actually thinking through what makes the most sense.

For example, when riverboat gaming came to town, the state police at the time had a pretty good reputation. A lot of politicians feared that our former governor, Edwin Edwards, was about to come back to power, so they amended the legislation to move the power to license the riverboat casinos out of an agency being created in that legislation which would have been directly answerable to the governor, and placed it with the state police, specifying even that the officer placed in charge of such matters had to be a commissioned trooper who had graduated from the state police academy.

The process was still, in my opinion, corrupt.

That an institution is currently credible and enjoys legitimacy is no argument at all in favor of giving it more power and more functions.
8.4.2009 11:15am
Soronel Haetir (mail):
Also, just because an agency is good at one thing (and given the last 15+ years, I'm not so sure the Fed is good at its basic task), what proof does that give that the agency will be good at a wholly different task?

Consumer protection seems very far afield from the realm of the Fed's institutional strengths.
8.4.2009 11:41am
Houston Lawyer:
I suggest a new agency with the name Big Brother.
8.4.2009 11:48am
MarkP (mail):
I really must question your view that the Fed is being given more powers because it is so respected. (I have no doubt that the Fed, in its powers, is "legitimate," because I believe that it's legitimacy is a function of Congress.)

The Fed's recent record has been abysmal. It is quite clear that the Fed under Greenspan kept interest rates far too low for too long, contributing to the housing bubble after 2003. The Fed failed to recognize the bubble -- or it failed to act to prevent the bubble. Either way, it was not competent to handle the situation and created a massive crisis.

On the regulatory side, the Fed did a horrible job making sure that the instiutions under its regulatory authority were adequately capitalized. And, when the Fed undertook responsibility for AIG, their management has been woeful (look at the $165m in bonuses given to AIG executives from US taxpayers).

And these are only the recent items.

With the proposals to increase the Fed's power, the most basic issue is: what is a "systemic regulator" supposed to do when an institution is so big, complex, or interconnected that it poses a systemic risk? Only Congress can decide which of these powers is appropriate -- break up the company? Stop its expansion? Prevent it from issuing shares? Prevent it from making guarantees? Prevent it from making loans? Increase its required capital cushion? Change its compensation practices? Until Congress decides which of these powers, if any, a "systemic risk regulator" should be given, it is IMPOSSIBLE to know which existing institution or institutions is best suited for the task. The greatest threat to our democratic institutions will be if the Fed (or any other "systemic risk regulator") is given discretion to decide what its powers will be; unfortunately, Congress may consider itself incapable of making these vital political choices. If that happens, self-government will take another hit.
8.4.2009 11:53am
Soronel Haetir (mail):
Also, in regard to your daughter, at least she had to take an actual driving test of some sort. That wasn't true for me in Idaho in the mid 90s. If you passed driver's ed all you had to do was go to the county seat and take the written test.

All I cay is it's a good thing the entire county had less than 5k people or there would have been a lot more crashing recent licensees.
8.4.2009 11:53am
geokstr (mail):
Seems to me at the minimum this new scheme had better have some internal checks and balances to prevent the type of overreaching that occurred when the government itself used the regulators and the process to force banks to scrap their credit standards to spread the real estate wealth around. Without that, this last "crisis" would not have happened.

Of course, Obama might not have been elected, and even if he had, he would not have had this very convenient and wonderfully timed crisis that's too good to waste to justify his aggressive and rapid leftward restructuring of the entire economy with thousand page bills that no one fully understands.

So now we've got the same folks whose very own leftwing philosopy of governance and economic policies caused the crisis in charge of "fixing" it.

We are so screwed.
8.4.2009 12:31pm
SuperSkeptic (mail):
Put substantively, Bair and Schapiro both object to the Administration's plan to vest so much of the authority for dealing with financial crises, under the doctrine of safeguarding against systemic risk, in the Fed:

An important question is raised by the Administration's plan to place so much of the power for addressing systemic risk in the Fed, and it does not appear to me to have been extensively discussed, at least not in the terms I suggest here.

Would somebody please define "systemic risk"

Until this is done, this conversation is superfluous.

And moreover, that's exactly what we need, more Article I power delegated to Article II "agencies" (the fed is an agency?)...because, from a historical perspective, in the last 40-80 years, executive power isn't spiraling out of control or anything...The Courts are nowhere near catching up to all the executive expansion anyway.
8.4.2009 12:39pm
Assistant Village Idiot (mail) (www):
Daughter, driving. Having brought up four sons into their twenties, one of the few things I would do over as a parent would be taking the car away more often. It is now just about the only leverage you have. Yes, good children don't want to upset you, but how much they care about that is now a fixed amount. Your increased concern no longer increases their concern. Their abstract powers are still new, and they can rationalise better than they can reason.
8.4.2009 12:58pm
The problem with the whole meltdown is not that we didn't have enough regulatory power, it's that those with the regulatory power didn't act.

They didn't act because they ran up against Congress, Chris Dodd and Barney Frank, and were stopped.

This whole bubble and burst could have been stopped in 1999, in 2001, in 2003, or deflated in 2005. Plenty of people were warning about it and trying to stop it.
8.4.2009 1:00pm
KA, with regard to both your daughter's driving test and the Fed, you show a persistent delusion that the government is there to do. Au contraire, it's there to be and it does it very well.
8.4.2009 1:03pm
MCM (mail):
All I cay is it's a good thing the entire county had less than 5k people or there would have been a lot more crashing recent licensees.

Which is probably exactly why there was no road test.
8.4.2009 1:14pm
Gulf Coast Bandit (mail):
When I lived back in Alabama in my teenage years, one of my buddies went to take the test. He did the road test, went into the office to await the results. The officer came out of the back room and said: "Son, here's your license. Watch them rolling stops, and have a great day."

I would comment on the actual substance of the post, but it went over my head.
8.4.2009 1:25pm
Smooth, Like a Rhapsody (mail):
Given that DC is the worst city for driving I have ever experienced, if she made it back to the BMV in one piece, I would say give her a class A CDL.
8.4.2009 1:31pm
Yes, this crisis is all the fault of the Democrats, despite Republicans having control of the Presidency, the Senate, and the House. And, of course, the banks who wrote and sold new securities backed by bad mortgages (which were the true cause of the collapse) were all run by Democrats--because bankers are not Republicans.
8.4.2009 1:46pm
Cato The Elder (mail) (www):
Yes, that's correct Angus, bankers are mostly not Republicans.
8.4.2009 1:52pm
Seattle Law Student (mail):

So now we've got the same folks whose very own leftwing philosopy of governance and economic policies caused the crisis in charge of "fixing" it.


Yes, this crisis is all the fault of the Democrats, despite Republicans having control of the Presidency, the Senate, and the House.

Can we just agree that we all caused the problem, as there is blame enough to go around.

It seems to me that the FED is a good place to put management of systemic risk. Their area of expertise is the whole monetary system, consequently they likely have the broadest view of the economy. Any other agency seems too narrowly focused on a particular segement of the economy.

Superskeptic - from the 'pedia: systemic risk is the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, group or component of a system.
8.4.2009 2:03pm
SuperSkeptic (mail):
Thanks for the wiki update, but, I'm still waiting...

still waiting...

still waiting...


Driver's licenses are entitlements with monetary impediments
8.4.2009 2:12pm
A Law Dawg:
Can we just agree that we all caused the problem, as there is blame enough to go around.

I didn't cause a damned thing, nor my wife, nor my daughter, but all three of us will be paying for this for the rest of our lives.
8.4.2009 2:44pm
the most profoundly political actions conceivable (the issuance of fiat money)

I don't agree with this assertion. Once you get beyond the common but economically false notion that money is basically currency, you learn that everyday Americans create and destroy money every day. Ordinary banking transactions with no political meaning whatsoever, between private parties, routinely create and destroy money.

Private banks, including, but not limited to, those that are part of the federal reserve system, profit from the act of expanding the money supply. Indeed, the basic notion beyond the multiplier effect is that the sovereign receives only a small share of all of the economic benefit of an increase in the money supply.

The intellectual model in which the Fed issues money and this translates directly into the money supply isn't how it really works. The creation of the economically relevant money supply is a team effort.

The Fed controls some key lever points that give it a disporportionate ability to impact the money supply, but the Fed's involvement is more like a rider holding the reins of a horse, influencing an independent being's actions, than like the brain of the horse itself driectly controlling those actions. Most of the time, this works reliably. But in times of panic the economy/horse can escape control and will do its own thing regardless of the Fed's wishes.

Private parties can and do create fiat money systems without meaningful governmental intervention. Historically, fiat money came first, and central government regulation and monopolization of it came second. The prohibition on the creation of fiat money is a purely constitutional and legal one, not a matter of natural law, and the Founders' command of modern financial economics was not particularly profound.

While the Fed has both a legal and de facto monopoly on the fiat currency in the United States, this isn't particularly tightly enforced at the margins, any more than the legal and de facto monopoly of the U.S. Postal Service is enforced at the margins.

In the postal area, express delivery (e.g. Fed Ex, DHL), parcel post services (e.g. FedEx, DHL, UPS), and post box services (e.g. Mail Boxes, Inc.) are now entirely competitive markets. A large part of the bulk mail process is handled by private firms that interface with the U.S.P.S. after having done much of what is traditionally its work. The private sector part of the deal has gobbled up everything but a core first class mail system where the government's non-profit status and entrenched economies of scale create economic, as opposed to legal, barriers to entry.

In the currency area, retail payments are cleared as much through private credit card systems as through Fed controlled check clearing and cash. Gift cards and cash value cards (e.g. for copying machines) operate as a transferrable, negotiable alternative to cash. Tokens are used in a variety of transit and other systems. Derivative markets are free to create de facto hybrid currencies, and the World Bank recently issued bonds so denominated. Exchange tradeable money market shares are essentially a parallel currency to their reference currency. Airlines and video games have quasi-currency point systems that are even allocated, in kind. One can trade depositary receipts not just in gold and silver, but in a wide variety of commodities. One recent adventure in fiat money issuance was California's brief flirtation earlier this year with IOUs. Elaborate barter point systems which are de facto fiat currencies have fallen mostly due to tax enforcement, rather than due to direct enforcement of the Fed's monopoly on currency creation, but some non-profit favor trading systems still persist and are even actualized as alternative fiat currencies.

The government has not discouraged, and indeed, at times encouraged, the creation of private electronic micropayment systems that amount to privately issued electronic currency.

Contrawise, large numbers of countries either manage without a domestic currency of their own at all (for example, West African countries with a CFA Franc or the E.U.'s Euro), or a domestic currency whose use in practice is overshadowed in economic relevance by a foreign currency (often the U.S. dollar with the $100 bill as a key unit of trade).

Government involvement in establishing and maintaining a currency is not profoundly governmental (and hence political) in nature.

Maintaining the leading fiat currency in the nation is something that the Fed and government do in practice, but there is nothing profoundly political about it, any more than the creation of electric power, which is sometimes a municipal function and sometimes a regulated private company function, is profoundly political.

Indeed, the Fed's legitimacy flows to a great extent from the fact that the Fed, even in its currency dealings, is as much of a private actor as it is a public, non-regulatory actor. Even where the Fed plays a strong regulatory role (e.g. in check clearing), often does so in the same way that private credit card companies do, with rules that are consented to by institutions on a quasi-contractual basis, which they can opt out from at grave economic costs but with no formal legal repurcussions.
8.4.2009 2:51pm
Gabriel McCall (mail):
I find it difficult to lend any credence to the idea that the Fed is expert when the its (ostensible) raison d'etre is to keep the value of the dollar stable, and yet that value has decreased by 95% since the Fed was created. If it is indeed expert, it's expert at something other than its purported mission.
8.4.2009 2:54pm
Cato The Elder (mail) (www):
This New York Times article, Lender's Role for Fed Makes Some Uneasy, amply demonstrates the sort of behavior Prof. Anderson is alluding to:

The central bank is increasingly having to make politically sensitive choices. For example, it is weighing whether loans to people who buy speedboats and snowmobiles are as worthy of help as those to people who buy cars. And it is being besieged by arguments from R.V. manufacturers and strip-mall developers that they play a crucial role in the economy and also deserve help.

Many of the decisions could have political repercussions. On Feb. 9, President Obama traveled to Elkhart, Ind., a Republican stronghold that Democrats hope to convert to their column. Elkhart is also home to much of the R.V. industry, which has been battered by the recession.

"When we talk about layoffs at companies like Monaco Coach and Keystone RV and Pilgrim International, we're not just talking numbers," Mr. Obama said, referring to three prominent R.V. companies. "We're talking about people who've lost their livelihood and don't know what will take its place."

At the time, Fed and Treasury officials suggested that they would finance only car loans, credit card loans, student loans and Small Business Administration-guaranteed loans.

But the Recreational Vehicle Industry Association and Indiana lawmakers — among them, Representative Joseph Donnelly, a Democrat, and Representative Marc Souder, a Republican — were already lobbying the Fed to include loans for recreational vehicles on its list of eligible collateral that the Fed would accept.

They were not alone. Rental car companies were pushing the Fed to finance their fleets. Hertz, which is owned by two private equity firms — the Carlyle Group and Clayton, Dubilier &Rice — hired Mr. Eizenstat to make its case.

In trying to persuade the Fed to relax its loan terms, Mr. Eizenstat led delegations of Hertz officials to both the Treasury and the Fed. They reached out to Ron Bloom, the co-chairman of the Treasury Department's auto task force, as well as to top aides to Mr. Geithner. They also made detailed financial presentations to Fed officials in Washington and New York.

While the Fed so far has denied Hertz's requests to relax loan terms, some of the lobbying appears to have worked. In March, the Fed announced that it would purchase loans used to buy light trucks and recreational vehicles. It also said that it would finance equipment leasing deals, rental car fleets and "floor plan" loans, which car and R.V. dealers use to finance showroom vehicles.

On May 17, the Fed refined its rules even more, saying that "recreational vehicles" included not just motor homes and campers but also boats, motorcycles and snowmobiles.

Fed officials said they had always intended to include those vehicles because they had long been financed through asset-backed securities of the type the loan facility was created to preserve. And the series of expansions, they said, did not reflect a capitulation to industry pleas. Rather, they simply announced additional details as policy decisions were reached.

In my opinion, Ben Bernanke has steadily been diminishing himself since he achieved his office; but he's the one winning, steadily aggrandizing the power of his institution. From this WSJ article titled, Bernanke Heads to Congress Battling Calls to Tame the Fed:

It has taken decades for the Fed to establish its independence. Until the 1930s, the Treasury secretary sat on the Fed's Washington board, and in the early 1950s, the Fed fought with the Treasury for more autonomy. But it wasn't until after former Fed chairman Paul Volcker jacked up interest rates in the early 1980s to kill inflation that full central-bank autonomy became an accepted part of political life. Today, Mr. Volcker is an adviser to President Obama.

When Mr. Bernanke first met Mr. Obama last July in the Fed chairman's stately office, Mr. Obama, then a candidate, began the conversation by saying, "The first thing I want to tell you, Mr. Chairman, is I have great respect for the independence of the Federal Reserve," according to attendees.

Mr. Bernanke got most of what he wanted in the Obama administration's blueprint for renovating the financial system -- including a plan to close big failing financial institutions in the future so they don't land in the Fed's lap, and more authority to keep overseeing those institutions.

The Obama plan gives the Fed some additional powers, but also takes some power away. Mr. Bernanke agreed to a proposal that the Fed must get executive-branch approval for unusual lending, such as the emergency AIG loans.

What a concession, Mr. Fed Chairman!

It did take decades for the Fed to achieve its vaunted level of independence, but don't underestimate the short amount of time that it will take -- minutes -- for our increasingly venal and irresponsible Congress to snatch all that hard-earned trust away.

Basically, we're doomed. The Fed was given a hard enough task as it was, to be responsible for the control of fiat money, and it did a relatively better job than other institutions only because it was insulated from day-to-day politics and its mission was kept relatively simple. The Treasuy Plan is going to change all that, not for the better, and our Congress is only too willing to oblige the Administration in its badly-defined goals since it too absolutely abhors the concept of responsibility.

PS: Don't forget to also read this suggestive Bloomberg article/opinion piece titled, Fed's Soup Kitchen Becomes Magnet for Lobbyists, by a Ms. Caroline Baum.
8.4.2009 3:11pm

Can we just agree that we all caused the problem, as there is blame enough to go around.

Of course, the so-called problem is purportedly an economic "meltdown", and during this meltdown the biggest public health risk in the U.S. is obesity. So I'd say whichever system cause this "problem" is a pretty f-ing good one.
8.4.2009 4:50pm
geokstr (mail):

Yes, this crisis is all the fault of the Democrats, despite Republicans having control of the Presidency, the Senate, and the House. And, of course, the banks who wrote and sold new securities backed by bad mortgages (which were the true cause of the collapse) were all run by Democrats--because bankers are not Republicans.

Did you read my comment? Where exactly did I say Democrats?

If you wish to confirm that it is the Democrats leading the way towards collectivism in this country for the last 50 years, I'll certainly not dispute that. The fact that some Republicans went along with this is definitely not to their credit. I'm a conservative, not a Republican, and disagreed profoundly with much of what the Bush administration did, which basically was to give in to the left on a whole range of very important issues.

But the whole "a house in every pot" philosophy that drove the scrapping of using information about a borrower like credit history, job history, assets, and down payment that had worked so well in the past does not come from the right, but from the left. To paraphrase a certain recent former presidential candidate who's been immersed in the culture of Marxist thought his entire life, by his own admission in his own autobiographies, "Spreading the real estate wealth around is good for everyone."

And banks were forced to scrap those standards regardless of what party their owners belonged to. Those bad mortgages were the cause of the collapse, not the new securites they were bundled into. If the original mortgages were sound, the new securities would have collapsed anyway? That's nuts!

Let me guess. You're a lawyer or a professor.

I stand by my comment.
8.4.2009 7:50pm

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