Quotes of the day

So if a junk mortgage originator can pool loans with down payments of less than 5 percent, carve them into tranches, and get a rating agency to rate some of the tranches as AA or higher, it can make those more attractive to a bank than originating a relatively safe loan. If you want to know why securitization dominated the mortgage market, this explains it. Regulatory arbitrage, pure and simple.--Arnold Kling

History teaches us that government engagement in times of severe financial crisis often arrives very late, usually at a point at which most financial institutions are insolvent or nearly so. In these conditions, the consequences and costs of inertia and inaction can be staggering. Fortunately, that is not the situation we face today.--Ben Bernanke

Communism is socialism that has metastasized.--pywll

Everything from comparative advantage to the Coase Theorem makes you slap your head with the inescapable logic of it, and wonder how it can have escaped the human race for so long. And still, it takes a genius to reveal these obvious truths to the rest of us poor slobs. Krugman's math is far too impenetrable for this English major, but the conclusions are as clear and lovely as a bell.--Megan McArdle

And just like in high school, it's always easier to hate the math nerds. No doubt they should get some of the blame for making the weapons, but they usually weren't the ones who pulled the trigger.--Kevin Maney

But when the tide laps at Gulliver's waistline, it usually means the Lilliputians are already 10 feet under. Before yesterday's surge, the Dow had dropped 25% in three months. But that only means it had outperformed nearly every single major foreign stock exchange, including Germany's XETRADAX (down 28%) China's Shanghai exchange (down 30%), Japan's NIKK225 (down 37%), Brazil's BOVESPA (down 41%) and Russia RTSI (down 61%). These contrasts are a useful demonstration that America's financial woes are nobody else's gain.--Bret Stephens

In his never-ending quest to be everything to nobody, John McCain has switched tactics again. He ran against Washington insiders, then he ran against the media, then he ran against Wall Street, then he ran against (different?) Washington insiders, and now McCain is running against his own tax plan.--Stephen Green

The simple but startling truth is that the major conflict of our time, democracy versus Marxist-Leninist totalitarianism--what The New York Times recently called "the holy war of the 20th century"--is almost entirely missing from American cinema. It is as though since 1945, Hollywood had produced little or nothing about the victory of the Allies and the crimes of National Socialism. This void is all the stranger since the major conflict of our time would seem to be a natural draw for Hollywood. --Kenneth Lloyd Billingsley