Explaining the credit crunch

The New York Times has a fantastic piece explaining how the little subprime mess has ballooned into trouble at some of the nation’s premier banking institutions. Great for those who know a little about the current situation, but probably not detailed enough for those bankers who live in it every day.

Favorite quote:

“The mortgages were then sliced into pieces and bundled into investments, often known as collateralized debt obligations, or C.D.O.’s (a term that appeared in this newspaper only three times before 2005, but almost every week since last summer).”

Time of Day

Normally I leave work between 6 and 7 every day. Yesterday I left at 5:30, so I could get a run in before the sun set and it became cold (I am running the Shamrock Shuffle on March 30).

I caught the bus at around 5:35, and noticed a peculiar thing: it was mostly women. And I do mean mostly – between 2x and 3x as many women as men.

Was it timing? Was it my route? I don’t know.

“Behind the Bling”

It sure has been a while! Sorry about the month between posts, people. I’ll try to not let that happen again.

A former Professor of mine, Erik Hurst, co-published an interesting paper concluding that:

  1. Blacks and Hispanics spend 30 percent more than whites on clothing, cars, and jewelry—an amount that averages out to around $2,000 per year per household.
  2. Blacks and Hispanics are spending less on education and health care and saving less money.

Signaling: Showing off this bling, in the form of nice clothes, nice cars, and so on shows that you have money and a job, something many members of these socioeconomic groups do not have.

Read the summary of the paper here.