Zero Hedge readers will miss out if they fail to carefully study Matt Taibbi's piece on Fannie, Freddie, and the mortgage bubble (as well as a number of other tangential but critically important topics). Mr. Taibbi makes much of being delicate with me over what he sees as our disagreement on the issues, but I think he mistakes a few (and generally minor) differences in our conclusions for a real divide on the facts. We are, as near as I can tell, in pretty violent agreement on the substance of the argument: The present exploding bubble is the result of mis and malfeasance on all sides. While Mr. Taibbi and I may diverge after that on where we go from here, I cannot find a single position from which I would demur in passages like this:
For what we’ve learned in the last few years as one scandal after another spilled onto the front pages is that the bubble economies of the last two decades were not merely monstrous Ponzi schemes that destroyed trillions in wealth while making a small handful of people rich. They were also a profound expression of the fundamentally criminal nature of our political system, in which state power/largess and the private pursuit of (mostly short-term) profit were brilliantly fused in a kind of ongoing theft scheme that sought to instant-cannibalize all the wealth America had stored up during its postwar glory, in the process keeping politicians in office and bankers in beach homes while continually moving the increasingly inevitable disaster to the future.
A must read for Zero Hedgers.