Waiting for his Pulitzer that prevented the 2008 recession

Peter Brimelow of Marketwatch writes about an article he wrote 15 years ago for Forbes that nobody paid any attention, but foretold of today’s upheaval in the lending industry.

Brimelow writes, “How did I become rich and famous while toiling as a wage slave in the impecunious trade of financial journalism? When my grandchildren ask this question, I will be able to reply: by writing two articles that prevented the financial meltdown, and likely recession, of 2008.

“Sort of.

“I really did co-write the first one, for Forbes magazine on Jan. 4, 1993. The Federal Reserve Bank of Boston had just published a study purporting to prove definitively that mortgage lenders were discriminating against minorities, the hot cause of the day.

“But when my brilliant co-author, Leslie Spencer, asked the Boston Fed’s research director, Alicia H. Munnell, what minority default rates were, she said proudly that census tract data showed that they were equal to whites. When Leslie pointed out that this actually proved there was no discrimination, because the lenders had somehow weeded out the credit risks down to the same acceptable level, Munnell was dumbfounded and had to concede (on tape) that she did not, in fact, have definitive proof of discrimination at all.

“We had discovered a fundamental technical flaw. We sat back and waited for our Pulitzer Prizes.”

Read more here.