Then I'm inclined to disagree at another portion of the post which seems somewhat contradictory to the point:
"it wasn’t an excess of greed and speculation which led to the financial crisis, but rather an excess of overcaution"
The greed then exists in alternate areas of the system. It isn't AAA bonds that are the issue, it is the fact that lesser bonds are being rated as AAA. Why are they being rated that way? The ratings companies have conflicts of interest and were... (wait for it) greedy.
In addition, calling this an "excess of overcaution" is laughable, if I can get decent returns from a "risk free" investment, that isn't cautious, it is logical.
It was pseudo caution. The finance industry saw that investors wanted to (in some cases, had to) buy conservative investments like AAA paper. They sold them a fantasy of conservative investment. It was so compelling that the utterly ridiculous notion of that much AAA paper was ignored.
After calling it 'excess of overcaution' he declared that it is leverage that causes crises. Leverage does not connect strongly with caution to me.
I guess I agree but the thing is that "greed" and "over-caution" actually very similar. Over-caution is greed for income without risk.
For example, Bernie Madoff's appeal wasn't based on offering income level that no mutual fund could match but rather offering an apparent combination of income and stability that no mutual fund could match (10%/year as reported each quarter).
I think there are some differences, but regardless within the context of this article the author states:
"it wasn’t an excess of greed ..., but rather an excess of overcaution"
I disagree with this statement, and clearly, based on your definition here, this can't be true either. Unless, saying "is wasn't greed it was greed" actually makes sense. Obviously I don't think you believe that, I'm just pointing out a major issue with the article as a whole.
"it wasn’t an excess of greed and speculation which led to the financial crisis, but rather an excess of overcaution"
The greed then exists in alternate areas of the system. It isn't AAA bonds that are the issue, it is the fact that lesser bonds are being rated as AAA. Why are they being rated that way? The ratings companies have conflicts of interest and were... (wait for it) greedy.
In addition, calling this an "excess of overcaution" is laughable, if I can get decent returns from a "risk free" investment, that isn't cautious, it is logical.