Final Report of the National Commission on the Causes of the Financial and Economic Crisis in the United States
Below is a collection of my annotations and comments about the Financial Crisis Report. It was originally a Twitter “Moments” project in 2017 which helps explain the unusual format. Twitter dropped “Moments” so I put everything here so I could more quickly review this amazing FCIC Report whenever the memory of the crisis starts to fade. The full, official “Final Report of the National Commission of the Causes of the Financial and Economic Crisis in the United States” can be found here and here.

Bigger banks would be safer.

How to stop banks from being regulated (may still apply today).

Regulatory chaos is good for the banks, said Bernanke.

Lobbying must have a great cash-on-cash return for the banks!


Financial Crisis Inquiry Commission (2011)

Financial Crisis Inquiry Commission (2011)

Financial Crisis Inquiry Commission (2011)

Financial Crisis Inquiry Commission (2011)

Financial Crisis Inquiry Commission (2011)

Financial Crisis Inquiry Commission (2011)

The Fed had enough authority to prevent the sub-prime mortgage crisis and Great Recession but didn’t use it.

They justified predatory loans as a “chance for homeownership.” For Blacks, homeownership ended up destroying wealth

Bad loans drive out good. The race to the subprime bottom.

Subprime mortgages go mainstream.
Greenspan killed an effort to more closely regulate non-prime mortgages.


Fed cuts rates to the lowest level in 40 years after the Dotcom bubble burst.

From 2000 to 2003, you could go from a $180K home to a $245K home and have the exact same monthly payment.

Compare the increases in prices in the Sand States (California, Florida, Arizona and Nevada) to the rest of the U.S.

As home equity skyrocketed the personal savings rate in the U.S. tanked. Why save nickels and dimes when your home is appreciating so fast?

Facilitating home equity extraction was Fed policy. Fed policy = Increasing household debt is good for the economy. Debt is good.

The race to the mortgage loan securitization bottom.

Bad mortgages drive out good.
Reckless lenders drive out good.

Perhaps the biggest advantage to securitization wasn’t that is spread risk but that it hid risk within its mind numbing complexity.

Let’s not pretend Americans are all mathematicians that can compare incredibly complex loans.
They can’t.
They don’t.
Let’s not pretend

To stop buying them in 2009 – after the bust – wasn’t a courageous decision of Jamie Dimon.

Appraisers get jacked around by mortgage brokers.

Washington Mutual handpicks appraisers who don’t bring in “low” appraisals.

The race to the mortgage bottom.

The Fed says subprime mortgages increase homeownership.

Fed: It’s not predatory lending.
States: Is to!
Fed: Is not!
States: Is to! And we have more power than you states do

Fed General Counsel.. “The mind-set was that there should be no regulation; the market should take care of policing”

“The federal regulators’ refusal to reform [predatory] practices… endorsement of their legality” IL Attorney General
