There’s an old saying: Those who forget history are doomed to repeat it. Let’s hope some of the nation’s big banks aren’t making that mistake right now.
The Wall Street Journal reported this week that banks are starting to warm again to the same mortgage bonds that blew up during the financial crisis of 2008. The private-label mortgage market virtually disappeared after the crisis; it reached about $70 billion last year. The Journal notes that this figure is still well below the $1 trillion peak of pre-crisis years. But nonetheless, this is a development to keep an eye on.