The revealing and esthetically pleasing chart that R&R’s Ann Rutledge produced to illustrate asset-backed bond default rates is featured by Felix Salmon in his Reuters blog.
Reflecting the value of analyzing the past in dealing with the future, Ann’s presentation on the development of the credit crisis is also recommended on the Zero Hedge blog.
Commenting on a column by economist Mark Thoma, Ann stresses the importance of applying transparent modeling to the rating of toxic assets in the process of recapitalizing banks:
“Valuation is the fundamental question. Perpetuating the myth that these things can’t be rated is catering to the forces of darkness. I think it’s rather well known now that we developed a self-consistent approach to valuing structured securities using empirical data. We brought it to market eight years ago, but the market rejected it as being too transparent–can’t be manipulated.”
For the full column and other comments, see Economist’s View, “Geithner: How We Tested the Big Banks.”
