Financial Crisis Inquiry Final Report Available

The Financial Crisis Inquiry Commission released its Final Report on the Causes of the Financial Crisis.

The 660 plus page report with dissenting commissioners' views is available free;
from the Commission here;
from GPO here;
and from my upload on Scribd here.

My personal biases are towards the scientific method, i.e. reproducibility. Since whatever causes presented in the report as an explanation for the financial crisis are not testable, I do not put much faith in the explanations in the report. Our state of financial, banking and economic knowledge has not changed since before the crisis. We did not understand the warning signs of a impending financial crisis before and we do not understand them any better now after the crisis.

The report is more a finger pointing, conventional wisdom, political document about the crisis than scientific inquiry into causes. The conclusions are based on observations without a reliable theory to explain any of the conclusions or causalities. The report fills a human and political need to find causes and blame even when the state of our knowledge does not lend itself to the task.

These types of inquiries remind me of the old beliefs that life could spontaneously occur in meats because maggots would suddenly appear on meat as it was left out in the open. It was later discovered that flies laid their eggs on the meat and the new born flies became larvae, maggots, before they matured into flies. When meat was placed in jars, covered with cloth, etc., no maggots appeared.

The report mentions many banking, financial, and regulatory things that existed before the crisis. Prior existence does not mean it caused the crisis, even if the logical connection exists in the minds of the report commission.

The report is more about closure than it is about finding causes. Unfortunately, it will be used as the basis to propose ineffective new regulations and laws.