Interesting: Crash of '08 More Like '73 Than '29

Don't compare the Crash of '08 to 1929. Think the Panic of 1873 instead. Charlie Smith, editor of Vancouver weekly The Georgia Straight, where I frequently write, just ran an interesting post about must-read backgrounder stories on the Crash of '08. One, titled The Real Great Depression, is from historian Scott Reynolds Nelson on how today's mess is closer to the financial tsunami of 1873 than '29. That's the one your grandparents' grandparents used to talk about. It ushered in new words like "bum" and "tramp" and led to massive social and political transformations that set the ground for socialism, fascism, the welfare state and the wars of the 20th century. Wonder what fun stuff is in store for us.

Meanwhile, ProPublica has a good post on how conflict-of-interest at debt-rating agencies stoked the current crisis. Here are two S&P employees chatting on IM last year:

S&P Employee #1: btw-that deal is ridiculous

S&P Employee #2: I know right.. model def does not capture half of the risk

S&P Employee #1: we should not be rating it

S&P Employee #2: we rate every deal

S&P Employee #2: it could be structured by cows and we would rate it

S&P Employee #1: but there’s a lot of risk associated with it – I personally don’t feel comfy signing off as a committee member.

TAGS: markets, interesting