Once you became an idea’s defender you had a harder time changing your mind about it.

Over and over again, the financial system was, in some narrow way, discredited. Yet the big Wall Street banks at the center of it just kept on growing, along with the sums of money that they doled out to twenty-six-year-olds to perform tasks of no obvious social utility.

The accounting rules allowed them to assume the loans would be repaid, and not prematurely. This assumption became the engine of their doom.

It was as if the ordinary rules of finance had been suspended in response to a social problem. A thought crossed his mind: How do you make poor people feel wealthy when wages are stagnant? You give them cheap loans.

The accounting rules allowed them to assume the loans would be repaid, and not prematurely. This assumption became the engine of their doom.

The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.

What are the odds that people will make smart decisions about money if they don’t need to make smart decisions—if they can get rich making dumb decisions? The incentives on Wall Street were all wrong; they’re still all wrong.

big fear of the 1980s mortgage bond investor was that he would be repaid too quickly, not that he would fail to be repaid at all.

I thought that I was writing a period piece about the 1980s in America, when a great nation lost its financial mind.