My Photo
Note: Jeff does not accept guest blog posts on A Dash of Insight.

For inquiries regarding advertising and republication, contact [email protected]

Follow Jeff on Twitter!

Enter your email address:

Delivered by FeedBurner


  • Seeking Alpha
    Seeking Alpha Certified
  • AllTopSites
    Alltop, all the top stories
  • iStockAnalyst
Talk Markets
Forexpros Contributor
Copyright 2005-2014
All Rights Reserved

« Reviewing John Thain | Main | Think You can Predict GDP Revisions? Think Again! »

August 05, 2008



Gaius - I like the line about the mission of the firm. The Syron interviews certainly did provide good support for your argument.

I have noted a few times the difficulty in these quasi-public institutions. If you want another example, think Amtrak!

Thanks for your comments.


gaius marius

as support for my above interpretation, i'm lucky enough to be able to offer:

syron increased the size and risk exposure to freddie in order to commit to what he perceived to be its social function.


I do not have any references but I heard on an NPR interview a couple of days ago regarding how editorial decisions are made and how the board did not run an article favorable towards the church at a time when the church scandals were breaking out so that it did not distract from the theme. I think the NY Times, among other newspapers, has made it its mission to frame the housing issue as one of corrupt, profit-seeking corporations against naive homeowners in difficulty because of personal medical issues. Anything that goes against this theme will not get an airing so that it doesn't dilute the attack.

gaius marius

prof miller -- i doubt we will ever be sufficiently informed about what went on behind closed doors at the GSEs. the times doesn't have the luxury, but i'm more than willing to wait for the book.

the article leaves a lot to be desired as a condemnation of syron -- but i do think singling out syron is a silly exercize in the first place. the GSE model is not his idea, and the structural problems of the GSEs antedate him by many years -- the flaws have been criticized since i was a lad, and it was always just a matter of waiting for the proper event to destroy them. had he wished to change the model, it's highly doubtful he could have in the face of congressional pressure.

the core problem with the GSEs is that they are serving two masters. paul jackson is articulating brilliantly the encroachment of social engineering on investor protections into the mortgage servicing field:

and this conflict is at the heart of the GSEs woes -- when the mission of the firm is something besides making money, it will eventually not make money.


Upside -

Thanks! It is nice to know that some find my work to be of value.




wonderful piece, seems anyone can write anything these days.



Thanks for the link, Mike. It is indeed an interesting article.



Barry - The quotation you cite does not support your (caps lock) conclusions.

It says that the author has 24 interview sources, not 24 different warnings. It could have been a number of different people who all knew about one or two instances.

In addition, the quotation says quite clearly that these included analysts, shareholders, and regulators, not just "execs." So your comment is factually incorrect, and in two different ways.

If the author and used more real sources and done a better job of characterizing the internal debate instead of aiming for an expose' I would not have taken up the subject.

In the Calculated Risk piece I cited, and which I encourage you to read, Tanta put it well:

"Actually, all but two of the "more than two dozen" were given anonymity to damage Richard Syron's career while protecting their own, by my reading of this. One former Freddie Mac executive and one industry consultant are named. Nobody else is. And we are given no idea how many of the "more than two dozen" are shareholders."

As to defending "bad players" --- let me suggest that collegial discussion, which you claim to encourage, avoids this sort of off-hand characterization of someone's work. But your raising the point in this instance is useful, maybe worthy of a new article.

I see many corporate "targets" of journalistic attacks as regular business people engaged in making difficult decisions. There is always internal dissent on tough issues. I believe that there is a lot of criticism of experienced executives by young journalists who do not (yet?) have the qualifications to be briefcase carriers, much less run major companies themselves.

I am going to make a dramatic prediction --

I note that you recently joined a corporate board. (Congratulations!) I predict that a few years from now, when you have more actual business experience, your attitude toward these executive decisions will be more nuanced and less doctrinaire, a bit more like mine.

As usual, thanks for making your views clear to readers at "A Dash."


Barry Ritholtz

Your main contention is false. Since you are critiquing others journalistic fairness and accuracy, let's apply the same standard to this post:

The article's main thrust was not, as you wrote, that Richard Syron may or may not have gotten a memo; It was that HE WAS REPEATEDLY WARNED ABOUT RSKS AND IGNORED THOSE WARNINGS.

Quote: "More than two dozen current and former high-ranking executives at Freddie Mac, analysts, shareholders and regulators said in interviews that Mr. Syron had ignored recommendations that could have helped avoid the current crisis."


Since you are critiquing other posts for their balance and accuracy, I am surprised you left out that little tidbit.


In fact, that sentence completely undercuts your whole thesis. Not only is your main contention inaccurate, but it is guilty of precisely what you accuse the NYT of.

Jeff, I am at a loss to understand your reasoning in this instance -- you seem to be defending a lot of bad players lately . . .

Mike C

This was posted on another message board I regularly read. I thought it was some incisive writing from a common sense perspective in terms of what has happened the last few years and is connected to some of this recent discussion:

The comments to this entry are closed.