The New York Fed has a neat new interactive map where you can check credit card and mortgage delinquency rates by county. Here's a screen grab:

I'd like to give a shout out to the people of Calhoun Co., Illinois—all 5,000 of you—because according to the New York Fed, you are completely on time with both your credit card and mortgage payments. Way to set an example.

Barbara!

For several years now, a few smart people--Morgan Stanley's Stephen Roach is the first to spring to mind, but there were others--have been arguing that the Federal Reserve ought to do more to rein in the creation of asset price bubbles. Alan Greenspan, after making a tentative attempt at bubble management with his famous "irrational exuberance" speech in December 1996, decided that it was just too hard to differentiate a bubble from perfectly rational exuberance until after it had burst, so the Fed should stick to cleaning up messes. As he said in 2002:

If the bursting of an asset bubble creates economic dislocation, then preventing bubbles might seem an attractive goal. But whether incipient bubbles can be detected in real time and whether, once detected, they can be defused without inadvertently precipitating still greater adverse consequences for the economy remain in doubt.

Anyway, it's a familiar debate--and one that's going to continue. Ben Bernanke has even made some noises lately about maybe reconsidering the Greenspan stance.

What I didn't realize until yesterday, though, was how long the debate has been going on. John Maynard Keynes explicitly addressed all these arguments in 1936 in chapter 22 of his General Theory (I've read Chapter 12 about 10 times, but apparently never got to Chapter 22). He wrote at length about those who thought the Fed and other central banks should have nipped the late-1920s boom in the bud with tighter monetary policy, and concluded that they were all wet:

The right remedy for the trade cycle is not be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.

My column this week is probably going to be about how we're all Keynesians now. In terms of supporting economic stimulus from Washington in dire times like these, I guess that's true. But as far as bubble- management goes, the Keynesian view looks like it's going to come in for a lot of flak in the years to come.

Yesterday I wrote a story for Time.com about how loan modifications aren't all they're cracked up to be. You can read it here.

Since we like our web stories short, I didn't have as much space as I might have liked to quote the evidence behind my conclusion—that loan modifications, at least the way they're being done at the moment, aren't the cure-all that politicians and economists are making them out to be. Now you get to read about that extra evidence here.

Alan White, a law professor at Valparaiso University in Indiana, looked at a pool of 4,342 subprime loan modifications reported by servicers between July 2007 and June 2008, and found that the aggregate amount of the loans actually increased from $912 million to $933 million. That's because one of the most popular sorts of modifications is to simply spread missed payments over the remaining life of the loan. Not surprisingly, that sort of change often only works as a short-term fix; redefaults are a huge problem. Bert Ely, a banking industry consultant I talked to, was pretty negative on the whole effort. “During the S&L crisis, we had a saying: a rolling loan gather no loss,” he said to me. “All you do is roll the problem forward, and I have a feeling that's how a lot of these loan modifications are going to turn out.”

The good news is that some servicers are moving toward more substantial interventions—reducing interest rates and, most importantly of all, docking principal balances.

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