“”Decades before anybody had ever heard of a mortgage derivative, an economist named Melchior Palyi predicted key causes of the 2008-2009 financial crisis with precision that makes a modern reader’s hair stand on end.
“His warnings help explain why investors insist on trusting market gatekeepers they know to be fallible—such as policy makers, regulators and credit-ratings firms. …
Mr. Palyi was fond of saying that sooner or later, too much credit always turns into a giant debit as borrowers crumple under the burden of escalating interest payments. That’s a warning this entire country would do well to heed.
Here’s the link: http://online.wsj.com/article/SB10001424052748704405704575596382345085258.html
Does anyone have more on Melchior Palyi