Imagine a country where nobody can identify who owns what, [title to] property cannot be easily verified, people cannot be made to pay their debts, resources cannot conveniently be turned into money, ownership cannot be divided into shares, descriptions of assets are not standardized and cannot be easily compared, and the rules that govern property vary from neighborhood to neighborhood, or even from street to street. You have just put yourself into the life of a developing country or former communist nation…

These words are from the classic book on third-world economics, The Mystery of Capital by Professor Hernando de Soto.

Frighteningly, these words describe not only a third-world economy, they precisely describe the jumbled-up financial instruments called “credit derivative securities” (including the now-infamous “credit default swaps”) that are now identified as the toxic assets of the global banking system. Daniel Hass


There are all sorts of connections between the Nixon administration and the Bush administration. But here’s one I didn’t know about: Hank Paulson was John Ehrlichman’s assistant in 1972 and 1973. Maybe you have to have lived through Watergate to know what that means. Paul Krugman