Finance Goes Rational

August 18, 2008 in capitalizing, explaining, objecting, pricing, testing
Tags: banking, credit, crisis, finance, foreclosures, irrationality, money, mortgage, norris, nyt, rationality

Many like to think that the trouble with finance is that it often goes irrational. But here is a clever quote from Floyd Norris about the credit crunch and the foreclosures crisis:
“Every bank is now acting rationally. They need to conserve capital, so they raise prices, tighten standards and sell foreclosed properties quickly. But when [...]