Big Dirty Money

A blog on business law, politics, and white collar crime

May 15, 2014

Comments, Clarifications & Corrections for “Other People’s Houses”

As the on-sale date for OTHER PEOPLE’S HOUSES nears, I have noticed a few points that deserve clarification and minor typographical errors to correct. Instead of silently storing-up a list of changes to make to the paperback edition, I plan to address them here first. Periodically, I will move up this post up to the top of the blog and add any relevant comments, clarifications and corrections:

Chapter 6, p. 93:  The sentence describing when President Ronald Reagan left office, should state January 1989, not January 1987.

Chapter 12, p. 204:  The observation that the Fed “was supposed to use its emergency lending powers to support traditional banks” was meant normatively. As a matter of law since 1932, under Section 13(3) of the Federal Reserve Act, the Fed had the power “under unusual and exigent circumstances,” to lend to “any individual, partnership, or corporation” when such borrower is “unable to secure adequate credit accommodations from other banking institutions.” However, it had not done so since the Great Depression.  As noted in this chapter and later in the book, the Fed once again used this emergency power during our recent crisis, including in the rescue of Bear Stearns and the bailout of AIG.

Thank you

In the wake of the financial meltdown in 2008, there were many who claimed it had been inevitable, that “no one saw it coming,” and that subprime borrowers were to blame.