This piece by Peter Scheer, executive director of the California First Amendment Coalition, is one of the best I’ve seen on the financial meltdown. Scroll down to register for the free CFAC assembly this Saturday at the Graduate School of Journalism at the University of California-Berkeley.
Disclosure–or the lack of it–is a root cause of the current financial crisis
By Peter Scheer
Economists and historians will be debating for years the causes of the financial crisis that, like a global array of dominoes, now threatens to take down the “real” economies of countries big and small, both “developed” and “emerging,” in a massive flight from investment risk unlike anything experienced since 1929.
To the experts’ lists of causes, let me add a lack of information–specifically, the systemic failure of lenders to disclose ample information about the risks of the mortgage loans being made to thousands of borrowers whose homes have since tanked in value, resulting in unprecedented rates of default. These defaults leave the holders of the affected mortgage investments–primarily banks around the world–with sizeable loan portfolios that they can’t value and for which there is no functioning market.
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