Sunday reading plus comments. Yes, from the NYT Business Section.

Here are two great articles from today's New York Times' Business section. Gretchen Morgenson wrote the first, titled Was There a Loan It Didn't Like? about a senior mortgage underwriter's experiences at WaMu. As you might expect from the title, the underwriter, Ms. Cooper, was pressured by higher-ups to approve any and all loans, regardless of what the loan applications and packages looked like.

I take issue, though, with a couple of statements in the article. First, mid-way through the article and Ms. Cooper's story: "Although Ms. Cooper couldn't see it, the wheels were already coming off the subprime bus." C'mon. Everybody who thought about this process at all figured out in advance that many people would eventually not be able to pay back their huge debts. This is why usury laws have existed throughout history. Also, "Hidden fees meant brokers could easily make between $20,000 and $40,000 on a $500,000 loan." Huh? How hidden could fees be when they're thoroughly itemized at closing? And all states require complete itemization as part of their consumer protections. And $20k to $40k? The standard origination fee is 1%, and that would be $5,000. Yes, there are garbage fees like processing, document fees, etc., but I've never, ever heard of them amounting to more than 2% of the loan. But whatever; it's a great article anyway.

The second article is by my new favorite economic columnist next to Ben Stein, Robert J. Shiller. Titled Challenging the Crowd in Whispers, Not Shouts, and it's about the group-think that led the Fed, prominent economists and other major financing institutions to ignore the mortgage market meltdown until it was too late. The article's tag says, "A taxi driver seemed to sense what economists didn't." Uh, yeah.