Quick Overview

• The Chicago Purchasing Managers' index rose from 44.5 to 48.2 in March.
  
• Canada’s GDP rose 0.6% MoM, and 2.2% YoY
  

• Japan's industrial production fell 1.2% in February.
  

• U.K.'s index of services rose 0.6% in January.
  
  

• In 2008 the USDA expects farmers to plant:
  86.0 million acres of corn, down 8% YoY.
  74.8 million acres of soybeans, up 18% YoY
  63.8 million acres of wheat, up 6% YoY.
  9.4 million acres of cotton, down 13% YoY.
  

• The USDA said, as of March 1st, U.S. stocks of:
  Corn totaled 6.86 billion bushels, up 13% YoY.
  Soybeans totaled 1.43 billion bushels, down 20% YoY.
  Wheat totaled 710 million bushels, down 17% YoY.

Quick Overview

• U.S. Personal incomes rose 0.5% in February, better than expected. Consumer spending rose 0.1%.
  
  

• The University of Michigan's consumer sentiment index fell from 70.8 to 69.5
  

• U.K.'s GDP rose 0.6% QoQ and 2.8% YoY.
  

• Japan’s T unemployment rate rose from 3.8% to 3.9% in February.
  Japan's consumer prices fell 0.2% MoM, but rose 1.0% YoY.
  
  

• The U.S. produced 6.48 billion gallons of ethanol in 2007, up 34% YoY. The U.S. capacity is now 13.4 billion gallons with another 5.2 billion gallons on the way in 08.
  

• The USDA said that, on March 1st, there were 65.909 million head of hogs and pigs in the U.S. -- up 6.5% YoY.
  

• (FT) Rice prices jumped 30% to an all-time high, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people
  

Quick Overview

• U.S. GDP was unrevised at 0.6% growth for the fourth quarter of 2007, the slowest pace since late 2002.
  

• The U.S. economy seems to be slipping into recession and the Federal Reserve must cushion the pain and make it as brief as possible, a Fed policy maker said.
  

• Ahead of the United States Department of Agriculture's planting intentions estimates out Monday, March 31, Allendale Inc. sees a 7.2 million acre decrease in corn acreage, a 10.6 million acre increase for soybeans, and a slightly higher total wheat planting figure

Senate panel chief questions Dimon's Fed seat
"I have great respect for Jamie Dimon, who's head of JPMorgan," Dodd, a Connecticut Democrat, said in the interview with National Public Radio.

"He also sits on the board of directors at the Federal Reserve in New York. Having decisions being made over the weekend with an institution where its leader is also a member of that board raises some serious issues," Dodd said. "It aught to be addressed."

Quick Overview

• U.S. new home sales fell 1.8% MoM and 29.8% YoY
  

• U.S. durable goods orders fell 1.7% in February. Excluding transportation, orders fell 2.6%.
  

• German business confidence increased from 104.1 to 104.8
  

• Industrial new orders for the Euro area 15 rose 2.0% MoM and 7.3% YoY.
  
  

• The U.S. Department of Energy said:
  Supplies of crude oil were unchanged at 311.8 million barrels.
  Supplies of gasoline fell 3.3 million barrels
  Supplies of heating oil fell 1.3 million barrels.
  Refinery use fell from 83.8% to 82.2% of capacity last week.
  Gasoline demand fell 0.3% YoY
  Distillate demand fell 4.0% YoY.
  
  
  
  
  

Quick Overview

• Standard & Poor's/Case-Shiller index of U.S. home prices fell by 11.4% in January, the biggest monthly drop since the index began in 1987.
  

• The Conference Board's consumer confidence index fell from 76.4 to 64.5 in March, weaker than expected -- it’s the lowest in 34 years.
  
  

• Canada’s retail sales rose 1.5% in January.
  

• Iceland's central bank raised its key interest rate by 1.25 percentage points to 15%, citing higher-than-expected inflation.
  

• The American Coalition for Ethanol says gasoline prices would be 6 to 9 cents per gallon higher were it not for ethanol.

Quick Overview

• The National Association of Realtors said existing home sales were at an annual rate of 5.03 million units in February, up 2.9% MoM and better than expected. Inventories of unsold homes fell 3% to 4.03 million units.
  

• Japan's sentiment index fell from +0.5 to -9.3 in the first quarter.
  

• (WSJ) Many Chinese towns, lacking irrigation systems, rely on ad-hoc well digging, a practice that is in effect reducing their ground water levels year by year.
  
  

• J.P. Morgan quintupled the price it will pay for Bear Stearns to $10 a share.
  

• India reiterates claim they will not need wheat imports in the coming year - a quite optimistic claim if production estimates could be believed.
  

• The Russian government said it would extend its 40% export tax on grain until July 1 from a previous ending date of April 30th.
  

• The USDA reports that commercial red meat production during February 2008 totaled 3.968 billion pounds, down 10% from January's 4.416 billion but up 10% from February 2007's 3.615 billion.
  
  

Sooner Fed bail-outs than the 1930s revisited
We should be thankful that the man now heading the US Federal Reserve - Ben Bernanke - spent his early career immersed in the details of that catastrophe. He has written books showing how a credit crunch can set off a vicious downward spiral, and do so with lightning speed. You do not mess around in such circumstances.

Quick Overview

• U.S. jobless claims rode 22,000 last week to 378,000.
  

• U.S. leading indicators fell 0.3% in February.
  

• The Philadelphia Federal Reserve's index of manufacturing improved from -24.0 to -17.4.
  

• The U.K.'s retail sales volume rose 1.0% in February,
  

• Canada leading indicators fell 0.3%.
  

• The USDA said there were 11.853 million head of cattle on feed, up 2.2% YoY
  

• The USDA said frozen pork inventory as of February 29, 2007, was 603 million pounds, up 25% YoY.
  

• The USDA said that there were 942 million pounds of frozen orange juice concentrate in storage, up 25% YoY.

Quick Overview

• U.S. government is lowering the capital requirements for Fannie Mae and Freddie Mac from 30% to 20% in an attempt to provide more liquidity to the mortgage market.
  

• Gold fell after the Fed reduced the Fed Fund Rate less than expected and signaled more cuts won't be as aggressive.
  

• Canada's wholesale sales rose 2.6%.
  

• Construction output in the Euro area rose 1.6% MoM and 1.6% YoY.
  

• The U.S. Department of Energy said:
  Supplies of crude oil supplies rose 200,000 barrels to 311.8 million barrels
  Supplies of gasoline fell 3.5 million barrels
  Supplies of heating oil fell 3.2 million barrels.
  Refinery use fell from 85.0% to 83.8%.
  Gasoline demand fell 0.1% YoY
  Distillate demand fell 5.4% YoY
  

Updates resume Mar. 19

Quick Overview

• (Bloomberg) -- Hong Kong shut all primary schools and kindergartens yesterday following the unexplained deaths of four young children with flu-like symptoms.
  
  

• Bear Stearns tapped the Fed, via JP Morgan, for emergency funding to keep from going under.
  

• U.S. consumer prices were unchanged in February and up 4.0% YoY.
  The University of Michigan's consumer sentiment index fell from 70.8 to 70.5
  

• Consumer prices in the Euro area rose 3.3%.
  

• The U.S. is in a recession that could be "substantially more severe" than recent ones, National Bureau of Economic Research President Martin Feldstein said.

Quick Overview

• U.S. retail sales fell 0.6% in February.
  
  

• Australia unemployment rate improved from 4.1% to 4.0%
  

• South African gold production fell 5% MoM, and 16.5% YoY.
  

• One in every 557 U.S. homes is in some stage of default RealtyTrac said.
  

• Carlyle Capital Corp fund (Amsterdam: CCC) said that it was unable to arrange a bailout and that it expects its lenders to seize its assets "promptly."
  

Quick Overview

• Concerns surfaced the Feds plan to boost financial market liquidity might prove inadequate to ease the stress in the credit markets.
  
  

• U.S. Federal spending rose 17% YoY, and revenues fell 12% YoY.
  
  

• Japan's GDP rose 0.9%.
  

• Australia's consumer confidence fell to 88.6 in March — lowest in 15 years.
  

• Industrial production in the Euro Area rose 0.9% in January and 3.8% YoY.
  

• Industrial production in India rose 5.3% YoY.
  
  

• The U.S. Department of Energy said that:
  Supplies of crude oil rose 6.2 million barrels to 311.6 million barrels.
  Supplies of gasoline rose 1.7 million barrels
  Supplies of heating oil fell 1.7 million barrels.
  Refinery use fell from 85.9% to 85.0% of capacity last week.
  Gasoline demand rose 0.4% YoY
  Distillate demand fell 4.2% YoY
  ...
  

Updates are delayed due to data problems.

US Fed pins economic hopes on $200bn liquidity boost
Mortgage debt is now greater than home equity for first time since records began.

Updates resume Mar. 8

US economy a '$3 trillion' casualty of war in Iraq
Stiglitz and Bilmes argue the true cost is at least US$3 trillion, under what they call an ultraconservative estimate. They say it could surpass the cost of World War II, which they put at US$5 trillion, adjusted for inflation.

Quick Overview

• The Institute for Supply Management said its index of national factory activity fell to 48.3 in February from 50.7 in January.
  
  

• The U.S. Census Bureau said that construction spending was down 1.7% from December's pace and down 3.3% YoY.
  

• Canada's GDP was down 0.7% in December, but up 2.7% YoY
  

• Japan's wages rose 1% YoY
  

• Manufacturing in Australia rose from 49.2 to 51.4 in February.
  

• Consumer prices in the Euro Area rose 3.2% in February.
  

• Mexico said December silver production declined 6%.
  

'Ninja' loans explode on sub-prime frontline
One family - the husband is a janitor, the wife a cleaner - bought their two bedroom bungalow in Oakland for $420,000 in 2005. Now their mortgage rate has reset and it is on the market for $119,000. It probably won't fetch the list price.
Over in Detroit there are now more than a handful of properties on the market at $100.

Quick Overview

• The U.S. Commerce Department reported January personal spending rose 0.4%, while personal income rose by 0.3%.
  
  

• Chicago Purchasing Managers s index of regional business conditions fell to 44.5 from 51.5.
  
  

• The U.S. core rate of personal consumption expenditures rose 2.2% YoY.
  
  

• GDP in India rose 8.4%.
  
  

• The unemployment rate in the Euro Area unchanged at 7.1%.
  
  

• Consumer prices in the Euro Area rose 3.2% YoY.
  
  

• The International Grains Council forecast 2008-09 global corn plantings down 3% on the year.
  
  

• Chinese January silver imports rose 105%.
  

What Happens When Consumers Stop Consuming?
Central bankers don't normally reduce interest rates in the face of rising consumer prices. But our poor Bernanke-led bank consortium feels it has no choice. The cannons of deflation to the left of them…the artillery of inflation making louder noises to the right - they'll attack on the left!

Why?

Two reasons. First, they believe they can lick inflation any time. That was what Paul Volcker showed them 25 years ago. Inflation can be beaten by clamping down on lending…raising interest rates…and tightening up on the money supply.

But deflation? The present generation of the world's central bankers watched Japan struggle for 18 years. They think they learned something.

Quick Overview

• U.S. GDP rose 0.2% QoQ and 2.2% YoY -- less than expected
  

• Japan's factory production fell 2% in January
  

• Germany's unemployment rate improved from 8.7% to 8.6%.
  

• South Korea’s current account deficit widened to $2.03 billion in January, the biggest deficit in almost 11 years
  

• The International Grain Council estimates 2008/2009 world wheat production at 646 million tonnes, compared with 603.6 last year.
  

• CALPERS, may increase its commodities investments 16-fold to $7.2 billion through 2010.
  

• MF Global exposed a $141.5 million loss from unauthorized trades in wheat by one of its reps.

Quick Overview

• U.S. durable goods orders fell 5.3% in January, weaker than expected. Excluding transport orders fell 1.6%.
  
  

• U.S. new home sales fell 2.8% from December's pace. YoY new home sales fell 34%.
  
  
  

• The U.S. Department of Energy said that:
  Supplies of crude oil fell 3.2 million barrels
  Supplies of gasoline rose 2.3 million barrels
  Supplies of heating oil supplies fell 1.3 million barrels.
  Refinery use rose from 83.5% to 84.7%
  Gasoline demand rose 0.4% YoY
  Distillate demand fell 3.5% YoY.

Quick Overview

• Germany’s Feb. business confidence index rose 0.7 to 104.1 -- stronger than expected.
  

• The U.S. Labor Department said that producer prices rose 1.0% in January and up 7.4% YoY. This is the biggest 12-month gain in more than 26 years.

As of today I have not changed the computed 70+% chance of US corn yield being below 150.6 BPA. – Elwynn—

Quick Overview

U.S. existing home sales fell 0.4% in January. This is 10.3 months of inventory. Median home prices fell 4.6% YoY.

Kazakhstan will curb grain exports by imposing custom duties starting March 1, according to reports. The majority of the country's grain exports are wheat.

Gold Falls as U.S. Pledges Support for Some IMF Bullion Sales
``If you're China, you're holding all those U.S. dollars in reserves, it wouldn't be a bad idea to swap some of that for gold,'' Gartman said.
China is the 10th-largest holder of gold amongst central banks, with just 1 percent, or 600 metric tons of gold, in its reserves, according to World Gold Council data.

America’s economy risks mother of all meltdowns Prof Roubini is even fonder of lists than I am. Here are his 12 – yes, 12 – steps to financial disaster.

Demand for wheat puts India at risk
B.C. Khatua, the chairman of the Forward Markets Commission, which regulates futures trading for food commodities ranging from wheat and rice to dried beans, said India urgently needed to improve agricultural productivity to stem food price rises, which hit the nation’s poor majority the hardest. “India has a deficit of oilseed, a deficit of many pulses and now a deficit of wheat – all the major staples are now getting hit by the demand-supply gap,” said Mr Khatua.

The Bonfire of Capital
It all sounds more complicated than it really is. Imagine a 200 ft. conveyor belt with two burly workers and a mountain-sized pile of money on one end, and a towering bonfire on the other. Every time a home goes into foreclosure; the two workers stack the money that was lost on the transaction, plus all of the cash that was leveraged on the home via "securitization" and derivatives, onto the conveyor-belt where it is fed into the fire. That is precisely what is happening right now and the amount of capital that is being consumed by the flames far exceeds the Fed's paltry increases to the money supply or Bush's projected $168 billion "surplus package". Capital is being sucked out of the system faster than it can be replaced which is apparent by the sudden cramping in the financial system and a more generalized slowdown in consumer spending..


..Harvard economics professor and former Council of Economic Advisers under President Reagan, Martin Feldstein, made this candid admission:
"There is plenty of blame to go around for the current situation. The Federal Reserve bears much of the responsibility, because of its failure to provide the appropriate supervisory oversight for the major money center banks.

Banks Lose to Deadbeat Homeowners as Loans Sold in Bonds Vanish
Each time the mortgages change hands, the sellers are required to sign over the mortgage notes to the buyers. In the rush to originate more loans during the U.S. mortgage boom, from 2003 to 2006, that assignment of ownership wasn't always properly completed, said Alan White, assistant professor at Valparaiso University School of Law in Valparaiso, Indiana.

Quick Overview

• Turkish troops launched a ground invasion into northern Iraq in pursuit of Kurdish rebels.
  

• Canada's retail sales rose 0.6% MoM and 5.8% YoY
  

• India’s gold imports in January fell 72% to around 24 tonnes from a year ago as soaring prices reduced demand, a senior official at World Gold Council said.
  

• The Far Eastern Freight Conference, whose member’s control 75% of Asia-Europe trade, experienced an eastbound volume increase of 4.8% YoY.
  

Government investigating link between ethanol, beef recalls
Studies from two universities show evidence that feeding cattle a byproduct of ethanol production known as distillers grains can increase their levels of a deadly form of E. coli bacteria.

Quick Overview

• The Philadelphia Fed's regional index of manufacturing fell from -20.9 to -24.0
  

• The Conference Board's index of leading indicators fell 0.1% in December
  

• U.K.'s retail sales volume rose 0.8% in January,
  

• The USDA said that its 2008 preliminary planting estimate for:
  Corn is 90 million acres, down 4% from the previous year.
  Soybeans are 71 million acres, up 12% from the previous year.
  Wheat is 64 million acres, up 6% from the previous year.
  Cotton is 9.5 million acres, down 12% from the previous year.
  
  

• The U.S. DoE said:
  Supplies of crude oil rose 4.2 million barrels to 305.3 million barrels.
  Supplies of gasoline rose 1.1 million barrels
  Supplies of heating oil fell 1.5 million barrels.
  Refinery use fell from 85.1% to 83.5%
  Gasoline demand rose 0.5%
  Distillate demand fell 1.9%
  Supplies of natural gas fell 172 billion cubic feet to 1.770 trillion cubic feet.
  

Record U.S. Cash Reserves: Waiting To Be Deployed, But When? There is a massive mountain of U.S. investable cash sitting on the sidelines, earning an ever dwindling rate of interest. This cash pile will help buoy financial markets, but only once the buyers’ strike in the credit markets ends.

Famines May Occur Without Record Crops This Year, Potash Says
``As protein consumption increases, as they move from fish to chicken, chicken to pork, and pork to beef, the demand for commodities increases almost by an order of magnitude.''

The people who hustle granite countertops are finally getting a rest News came yesterday, that the Fed has quietly lent some $50 billion to member banks using a new method - an "auction facility" that allows banks to put up unconventional collateral. The government no longer reports a figure for M3, the broadest measure of the money supply, but shadow analysts say it is going up at 15% per year - about six times faster than GDP growth.

Quick Overview

• U.S. Housing starts rose 0.8% MoM, but fell 28% YoY.
  

• U.S. Consumer prices rose 0.4% in January and 4.3% YoY.
  

• Canada's composite index of leading indicators rose 0.2%.
  

• The per-acre cost of fertilizer to produce corn has gone from $95 an acre to $130, says David Asbridge, a senior economist for Doane Advisory Services.
  

• India is likely to import 3.5 million tonnes pulses in FY09. Rajasthan and Madhya Pradesh, the main pulses producing states, have not received enough rainfall.

Coffee Jumps in N.Y. as Inventories Dwindle, Commodities Surge
Stockpiles in warehouses monitored by ICE Futures U.S. have dropped 3 percent this year. Coffee inventories in Brazil, the world's biggest grower, are at a 50-year low, said Jaime Menahem, a trader at Alaron Trading Corp. in Miami. The UBS Bloomberg Constant Maturity Commodity Index surged as much as 3.1 percent to the highest ever, led by record crude-oil and gasoline prices.

Quick Overview

• YoY Consumer prices in Canada rose 2.2%
  

• Czarnikow lowered the world sugar production surplus for 2007-2008 from 10.5 to 9.7 million tons.
  

• The Supreme Court turned down a legal challenge to the warrantless domestic spying program Bush created.
  

• Toshiba is pulling out of the HD DVD business, handing victory to Sony's Blu-ray.
  

• Fidel Castro retired.
  

• Banks "quietly" borrowed $50 billion from the Fed.

• 
  

• Crude oil rose to $100.10 on speculation OPEC will cut production.

A Financial War With No Winners
So, maybe the stock market is looking at this situation, too. And maybe it sees stocks as a protection from inflation…maybe it's guessing that an investment in a profit-making business is a better place for money than a bank account. Maybe it wants to go up because of inflation…and wants to go down because of a coming slump. In the end, it goes nowhere.

And maybe the bond market sees the same picture. Maybe it sees a slowdown…which would be good for bond prices…but rising rates of inflation too, which would be bad. What should it do? It doesn't know any more than anyone else. So, it bides its time, waiting to see how the war will turn out.

Quick Overview

• U.S. industrial production rose 0.1%
  
  

• U.S. consumer sentiment fell from 78.4 to 69.6
  

• Reuters said lack of rain in the Ivory Coast for the last couple of months may delay this year's mid-crop cocoa harvest
  

• GDP in Indonesia rose 6.25% QoQ.
  
  

• Argentina extended restrictions (again) on exports of wheat in an attempt to provide for domestic supply. The U.S. banking and food industry would like Washington to follow suit.

• Because of weather problems, sugar output in Chinas Guangxi region, the country's largest producer, may drop 1 million tons from the original 8 million-ton forecast.

Quick Overview

• U.S. exports rose $2.2 billion in December, while imports fell $2.2 billion—resulting in $58.8 billion of net imports.
  
  

• Australia’s unemployment rate improved from 4.3% to 4.1% in January,
  

• Canada's exports fell 3.1% in December, while imports rose 0.7% -- resulting in $2.4 billion of net exports.
  

• GDP in the Euro zone rose 0.4% QoQ and 2.3% YoY.
  

• GDP in Japan rose 0.9% QoQ and 1.8% YoY.

• BOJ kept interest rate unchanged at 0.5%.
  
  

• Thailand has started requiring that all its diesel fuel include a component made from palm oil, a move that could reduce costly energy imports but is driving up prices for the commodity.
  
  

• Grain and oilseed prices rose on fresh signs of demand and shrinking supply. Almost half of China’s autumn and winter rapeseed crop was negatively affected by the recent rain and snow storms, the China National Grain & Oils Information Center said.
  
  

• The U.S. is importing wheat?? According to Dow Jones Newswire a million bushels of German wheat has been bought by a U.S. firm (Cargill?)for blending with other U.S. wheat.
  
  

Americans Selling Homes See Prices Go Below Mortgage (Update2)
By the end of this year as many as 15 million U.S. households may owe more on their mortgages than their homes are worth, according to an estimate from Jan Hatzius, chief U.S. economist of New York-based Goldman Sachs Group Inc.

Quick Overview

• U.S. retail sales rose 0.3% in January -- better than expected.
  

• U.K.'s unemployment rate improved to 5.2%, the lowest since 1975.

• Producer prices in Japan rose 3.0% YoY.
  

• Consumer confidence in Australia fell 103.1 to 97.4
  

• Industrial production in the Euro area fell 0.2%.
  

• The DOE said: Supplies of crude oil rose 1.1 million barrels to 301.1 million barrels.
  Supplies of gasoline rose 1.7 million barrels
  Supplies of heating oil rose 600,000 barrels.
  Refinery activity improved from 84.3% to 85.1% of capacity
  Gasoline demand rose 0.4% YoY
  Distillate demand fell 2.8% YoY
  

Quick Overview

• Warren Buffett unveiled a plan to “reinsure” $800 billion of municipal bonds.
  

• Six U.S. Banks launched a program aimed at staving off home foreclosure for seriously delinquent borrowers.
  

• Consumer prices in the U.K. rose 2.2% YoY.
  

• The Senate passed a White House demanded surveillance measure that grants legal impunity to companies that helped the government's warrantless spying program.
  

• The DOE said OPEC's oil production increased from 32.15 to 32.23 million barrels a day while surplus capacity fell from 1.50 to 1.40 million barrels a day.

Quick Overview

• Dow-Jones said Bank of America and Chevron will replace Altria Group and Honeywell International in its Dow-Jones Industrial Average effective Feb. 19th.
  

• Bush signed the $170 billion stimulus package.
  

• U.K.’s producer prices rose 5.7% YoY
  

• Goldman Sachs raised its three- and six-month outlook for Chicago wheat futures by 47 percent to $13.50 a bushel after the U.S. Department of Agriculture cut projected 2007/08 U.S. wheat ending stocks to 272 million bushels, the lowest level since 1947/48.
  
  

• The global corporate default rate in junk debt will jump to 4.6% by the end of this year, Moody's Investors Service said.
  
  

• South Africa's electricity shortage continues with state owned Eskom, which won't be able to increase capacity until 2013, asking consumers to cut usage by 10 percent.

Quick Overview

• The U.S. Congress passed and sent to Bush a $168 billion economic stimulus package.
  
  

• Canada’s unemployment rate improved from 6.0% to 5.8%
  

• The USDA's estimate of 2007-2008 U.S. ending stocks of:
  Corn unchanged at 1.438 billion bushels.
  Soybeans were lowered from 175 to 160 million bushels.
  Wheat was lowered from 292 to 272 million bushels.
  Sugar was raised from 2.006 to 2.029 million tons.
  Cotton was raised from 7.90 to 8.20 million bales.
  

• The USDA's estimate of 2007-2008 world ending stocks of:
  Corn was raised from 101.3 to 101.9 million tons.
  Soybeans were lowered from 46.2 to 45.8 million tons.
  Wheat was lowered from 110.9 to 109.7 million tons.
  Cotton was raised from 54.75 to 57.33 million bales.
  
  

• The USDA lowered its estimate of the 2007-2008 Florida orange crop from 168 to 166 million boxes, but increased its estimate of the juice yield from 1.60 to 1.62 gallons per box
  
  

• There are rumors that Brazil may start buying US wheat as soon as April.
  
  
  

THE REAL SCANDAL
At the crisis' core are loans that were made with virtually nonexistent underwriting standards - no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.

Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?