There is a saying among bank examiners (people working for government regulators who inspect the condition of banks), "The worst loans are made in the best of times, and the best loans are made in the worst of times."

1.Explain what this aphorism means.

2. Would Hy Minsky agree or disagree with this statement? Why? Identify specific features of Minsky's hypothesis that support your answer.

3. John Geanakoplos develops a model that explains how the "best of times" evolves into the "worst of times." Identify three specific features of Geanakoplos' model that explain this process.Provide three examples from the stories of Ed Andrews and/or Carl Richards that are consistent withGeanakoplos' framework.