Confidence Men, Part One: I'm reading Ron Suskind's book so you don't have to

...unless you just want to, of course. Far be it from me to diss anyone's reading preferences.

And...I'm working on it, but I will tell you this as a teaser: The President was WAY tight with Wall Street long before he became President, and the friends he made helped him understand how derivatives worked, how the mortgage market functioned, what a CDO is (Collaterialized Debt Obligation), and how they mitigated the risk of the CDOs via CDS (Credit Default Swap - basically, insurance to cover the risk of the mortgage securities going belly-up). I've read three of the books about the 2008 financial meltdown: Too Big To Fail by Andrew Sorkin, All the Devils are Here by Bethany McClean and Joe Nocera, and Gretchen Morgenstern's Reckless Endangerment, which focuses exclusively on Fannie Mae/Freddie Mac and the housing subprime market.

Suskind does an excellent job summarizing what actually happened. And he also quotes Barney Frank admiringly. Of course he chose not to point out that Barney Frank, who is a smart guy, was a long-time defender of the GSEs (Government-Sponsored Entities, which is Fannie Mae and Freddie Mac) even BEFORE he got his partner a job there. And he takes no responsibility for pushing back on efforts to regulate the GSEs more closely....and Suskind doesn't force the issue. This is a huge blind spot.

But, back to the President: As a candidate, Barack Obama had some very good "jungle guides" to help him understand where the risk was on Wall Street - the head of UBS, Richard Wolf, who introduced him to other executives who saw this coming. Mr. Obama, as candidate, was very good (and probably still is) at synthesizing information from a multitude of sources. But once he is elected....it's clear he doesn't know what to DO with it.

More tomorrow.