For reference. I was checking Overcoming Bias to see if it had any synergies with Taleb and found it was fairly quiet except for some early skepticism which didn't seem well founded. One of the more sensible sounding commenters pointed to Stan Liebowitz. I thought I had this idea somewhere else on Cobb, and I do, but Liebowitz isn't keyed to it. It was Wallison from the AEI. I'm changing that now. Here's Liebowitz in Feb of 2008.
Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed “the most flexible underwriting criteria permitted.” That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.
Who was that virtuous lender? Why—Countrywide, the nation’s largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy.
In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide’s chief executive bragged that, to approve minority applications that would otherwise be rejected “lenders have had to stretch the rules a bit.” He’s not bragging now.
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