There was a glorious time between the mid-1980s and 2007 when inflation was low, economies boomed, and recessions were short and infrequent. In general, the business cycle -- an economics term that refers to the cycle of growth, contraction, and recovery that's a feature of every normal economy -- was subdued. When the economy slowed, it didn't slow for long.

Economists have wracked their brains trying to explain this period of time. Some attribute it to the rise of China and India, which fed the world with low-cost goods. Others say it was Alan Greenspan's skilled manipulation of interest rates. Others think it was just blind luck. Now, two economists at the Minneapolis Federal Reserve say we have baby boomers to thank.

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You can’t hold a good banker back, it seems. I had to laugh when I read the cover of the FT this morning, with a story on how Goldman Sachs, Barclays and others are finding ways to soften the burden of the new capital requirements being imposed on them in the wake of the financial crisis. One of the ways they are doing it, apparently, is by splicing and dicing together assets from several different clients into a single security, which, as the FT notes, “can be sold to other investors and rated by a credit rating agency, potentially reducing the capital allocated against the assets by between 10 percent and 50 percent.”

It’s complex securitization. Sound familiar? It should – it’s what started the financial crisis to begin with!

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