Wednesday, May 19, 2010

A Crisis of Vocabulary

Last week, I linked an NPR story that highlighted similarities between the Greek & U.S. financial crises. If you listened to the story or read the transcript, you heard an investment professional say that, "[t]here was a crisis of confidence in Europe that started with Greece."

When people no longer want to lend you money because they don't think you will be able to pay them back, that is NOT a crisis of confidence, it's good underwriting. It is also something that has been sorely lacking in the mortgage market over the last several years.

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