Tuesday, November 27, 2007

Old Adages and Subprime

There's an interesting post by Irwin Kellner over at Marketwatch.com. In his commentary, he applies a number of old adages to the recent subprime mess. It is amazing how many of the "rules of thumb" that we repeat in financial literacy and economic education courses, somehow managed to slip by the people who had their fingers on the money buttons.

Advice that we all know, somehow didn't get applied. And while hindsight is.... well, I'm starting to wax epigrammatic. The fact is, when markets are acting irrationally (and they were), that's when it's hardest to keep the fundamentals in mind. And this incident is all about missed fundamentals.

I would recommend that if you are using the subprime as a topic of discussion in either economics or personal finance class, you look over Kellner's list and use them as discussion starters for either large or small group activity. Please let me know how these work for you and your students.

1 comment:

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