across_the_curve_031808.pdf (application/pdf Object)

This is interesting [pdf].(Written by Bear Stearns economists earlier this week.)

Near the end of the newsletter, “It is only a pity (and from our perspective that is a massive understatement) that the Fed did not hike rates more rapidly in 2004 and 2005, which would likely have headed off the rise in leverage and the boom in mortgage lending.”

It is so strange when a firm with extremely aggressive leverage, who would have claimed at the time, “Leave us alone-markets work!” meets a post-facto desire for regulation. Sigh.