{"id":588,"date":"2016-03-06T13:32:38","date_gmt":"2016-03-06T19:32:38","guid":{"rendered":"http:\/\/jimlund.org\/blog\/?p=588"},"modified":"2016-03-30T11:58:45","modified_gmt":"2016-03-30T16:58:45","slug":"links-for-march-2016","status":"publish","type":"post","link":"https:\/\/jimlund.org\/blog\/?p=588","title":{"rendered":"Links for March 2016"},"content":{"rendered":"<p><a href=\"http:\/\/neweconomicperspectives.org\/2016\/03\/urgent-need-save-orthodox-economists-crippling-myths.html\">The Urgent Need to Save Orthodox Economists from their Crippling Myths by William Black<\/a><\/p>\n<blockquote><p>Our autopsies revealed a number of patterns that proved critical to our analysis, predictions, and policy prescriptions.  For the sake of brevity I will not define here terms I have explained in hundreds of blogs, articles, and slides.  As I noted, the blogger has heard me present and define the terms.  First, we came to understand that the S&#038;Ls were \u201ccontrol frauds.\u201d  Second, we found that \u201caccounting\u201d was the \u201cweapon of choice\u201d in finance \u2013 we were dealing with \u201caccounting control frauds.\u201d  Third, we realized that accounting control fraud had become epidemic.  Fourth, we realized that the control frauds were so numerous and concentrated (by asset type, commercial real estate loans (CRE) and geography) and growing so quickly that they were hyper-inflating regional real estate bubbles in the Southwest.  Fifth, we identified the four \u201cingredients\u201d of the fraud \u201crecipe\u201d for a lender.  Sixth, we recognized that the CEOs running control frauds ran them for their personal benefit, by looting the S&#038;L.  Seventh, we recognized that firms following the fraud recipe were mathematically guaranteed to report record (albeit fictional) profits.  Eighth, we realized the truth of the industry saying: \u201ca rolling loan gathers no loss.\u201d  Ninth, we identified the recurrent scams by which S&#038;L control frauds, individually and collectively, transmuted massive losses into fictional gains.  Tenth, we realized that the CEOs running accounting control frauds were routinely able to suborn supposed \u201ccontrols\u201d by using the ability to hire, fire, and expand the engagement (in the case of outside auditors and counsel) to generate a \u201cGresham\u2019s\u201d dynamic (Akerlof 1970).  Eleventh, we realized that the accounting control frauds had a great \u201ctell\u201d \u2013 they had to gut their underwriting and internal controls to follow the first two ingredients of the fraud recipe.  Twelfth, we saw that the fraud recipe created an Achilles\u2019 \u201cheel\u201d \u2013 the need for extreme growth, so we adopted a rule limiting growth.<\/p><\/blockquote>\n<p><a href=\"http:\/\/archive.wired.com\/special_multimedia\/2009\/st_infoporn_1702\">Playmate figures graphed!<\/a><br \/>\n<a href=\"http:\/\/bactra.org\/Medawar\/phenomenon-of-man.html\">The Phenomenon of Man reviewed by Sir Peter Medawar<\/a><br \/>\n<a href=\"http:\/\/johnjosephkessel.wix.com\/kessel-website#!creating-the-innocent-killer\/ce5s\">Creating the Innocent Killer: Ender&#8217;s Game, Intention, and Morality by John Kessel<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Urgent Need to Save Orthodox Economists from their Crippling Myths by William Black Our autopsies revealed a number of patterns that proved critical to our analysis, predictions, and policy prescriptions. For the sake of brevity I will not define here terms I have explained in hundreds of blogs, articles, and slides. As I noted, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-588","post","type-post","status-publish","format-standard","hentry","category-links"],"_links":{"self":[{"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=588"}],"version-history":[{"count":4,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/588\/revisions"}],"predecessor-version":[{"id":593,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=\/wp\/v2\/posts\/588\/revisions\/593"}],"wp:attachment":[{"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jimlund.org\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}