Kohn is an idiot.
The problem was not securitization, the problem was government incompetence.
* * * * * J B K * * * * *
San Francisco
Reuters) - Federal Reserve Vice Chairman Donald Kohn said on Wednesday that top policy makers had been "a little complacent" about complex financial instruments that contributed to the global financial crisis.
The banking meltdown, which resulted in emergency measures by the central bank totaling well over $1 trillion, helped push the world economy into its first recession since World War Two.
"The reality is that we didn't understand the economy as well as we thought we did," Kohn said in a speech at Davidson College in Davidson, North Carolina.
"Serious deficiencies with these securitizations -- the associated derivative instruments, and the structures that evolved to hold securitized debt -- were at the heart of the financial crisis."
