Sunday, February 15, 2009

Information from the NYT

Concerning my post below, The 2004 Banking Leverage Rule Change, there was an interesting comment from an anonymous poster.

I had noted a NYT article titled,"Agency's '04 Rule Let Banks Pile Up New Debt" and pointed out, first, that a quick check of Bear Stearns leverage ratios did not support the story, and second, that it would have been nice for the NYT to do a bit more work and provide the data to support or reject their hypothesis.

"Anonymous" found a very nice post on Wikipedia that gives a graph of five banks' (gross) leverage from 2003 to 2007. I will leave readers to look at the graph and make their own conclusion (my response to the comment might help). I think the graph supports my first point above, which is that the 2004 change in leverage regulation is no smoking gun.

"Anonymous" concludes with, annoyingly I have to say, "I think that I'm gonna get my info from the NYT going forward..."

Well, no. Look how easy it was for you to find that quite nice chart on Wikipedia, with (clickable!) references. Or for me to find the original data in the Bear annual report.

I think the right conclusion is: Wikipedia 1, NYT 0.


Kevin said...

I still don't know why is it naive to assume that the 2004 change in leverage regulation resulted in the IBs taking more leverage.

And, I still don't know why the NYT is being criticized for not presenting a chart that would have bolstered its argument.

Robert G. Hansen said...
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