moral hazard

Who Gains and Who Loses from Credit Card Payments?

This new Federal Reserve study is a fascinating look at credit card utilization across income brackets. It’s showing up all over the place: NY Times, Wall St. Journal, etc. It’s also an incredible distortion. There are a number of variables for which it fails to account. The most egregious were pointed out by Matthew White …

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Modified Mortgages: A New Lesson in Moral Hazards

The Wall St. Journal (and every other reputable news agency) is reporting today that the actions taken by banks to modify the mortgages of those citizens who were already delinquent on their mortgages has not had the desired effect. Specifically over 50% of these individuals re-defaulted within 6 months. This of course calls into question …

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