Gretchen Morgenson of the New York Times writes that money management (the subject of most of my posts), along with the mortgage business are the two biggest sources for the undue influence of finance in our economy. She cites a paper from the Harvard Business School by Scharfstein and Greenwood entitled "The Growth of Modern Finance". What Morgenson doesn't explore is the relationship of money managers to the excesses in the mortgage industry. Who do you think owned the stocks of all those mortgage brokers, government sponsored enterprises, and over leveraged banks? Money managers. And who bought the mortgage backed securities, and mis-analyzed their contents? Money managers.