Crisis we should have had

Ygelsais coined the concept "the crisis we should have had" in the context of all the obsession with deficits and the idea that the U.S. is Greece. (If we were Greece, our problems would be easy to fix. We'd just raise taxes.)

Here's another Friedman column on runaway spending. Nowhere does he mention the Bush tax cuts, the housing bubble and financial crisis. Government spending went up because of the crisis so maybe we should concentrate on preventing asset bubbles and financial crises or at least respond will in the aftermath.

Bonds Backed by Mortgages Regain Allure

Others in the industry are also bullish, pouring money back into mortgage securities. Trading has surged in recent weeks. Prices have risen more than 15 percent in the first two months of 2012, after dropping by as much as 40 percent last year.

“There was a lot of money waiting on the sidelines because yields were starting to look very attractive,” said Jasraj Vaidya, a strategist at Barclays Capital. “Lots of it seems to have come out now.”

...

The mortgage bond market is a very different creature than it was before the financial crisis. For one, it is much smaller: very few residential mortgage-backed securities have been issued since the crisis. The market, at $1.3 trillion, is half the size it was at its peak and shrinks by an estimated $10 billion every month.