Alan Greenspan: Markets Need Regulation to Function Properly

[WDCRob]

My extremist views on 'free markets' were wrong.

The money (so to speak) quotes:

Former Federal Reserve chairman Alan Greenspan called today for imposing some of the same sorts of regulations on mortgage securities he resisted when he was in office, acknowledging that the current financial crisis had exposed "a flaw" in his view of how the world and markets function.


Greenspan ... said that he remained "in a state of shocked disbelief" that banks and investment firms did not do a better job of analyzing the risks involved with investing in home mortgages extended to less creditworthy borrowers.


Greenspan acknowledged that the failure of that expected self-regulation represented "a flaw in the model" he used to analyze economics. "I was going for 40 years or more on the perception that it was working well."

[photoncounter]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

http://www.bloomberg.com/apps/news?p...nLk&refer=home

``Yes, I found a flaw,'' Greenspan said in response to a grilling from the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.''
Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. Forecasting is an inexact science, he said.

[don]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

I think we'd all feel better if the old bullshit artist, and current shill for PIMCO, would just shut the f**k up.:mad:

[Rajiv]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

Here is the Greenspan testimony

He is totally clueless!

[Tulpen]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

I think we'd all feel better if the old bullshit artist, and current shill for PIMCO, would just shut the f**k up.:mad:

Ditto.

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[jtabeb]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

Ditto.

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He's NOT clueless. He's playing clueless so as to avert blame. Easier (and less crimial culpability) if you claim " I didn't know" vs I Knew and did it willingly.

Besides, I was looking for something like this.

It's a play right out of Atlas Shrugged, Francisco D'Anconia has had all these pigs buy into this mexican mine. They trust him because he has a reputation as a exceptional capital manager. He then pull's the rug out from underthem and says he's really an incompetent idiot playboy and the shares in the mine plunge! Greenspan has just done the exact same thing (minus the playboy thing) for the US financial system. (As he intended, I think)

What I DON'T think is up for discussion is that Greenspan has trashed the US financial system. What was his motivation? That is a different matter.

You have my opinion. What's yours?

[Supercilious]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

What I DON'T think is up for discussion is that Greenspan has trashed the US financial system. What was his motivation? That is a different matter.

You have my opinion. What's yours?

This a very interesting question and the answer may be extremely counterintuitive. Let's say I would not be completely surprised if Allan Greasepan is the ultimate Maestro and he will go down in history as the man who brought down singlehandedly the whole corrupt financial system by destroying it from the inside. But I don't have yet any proof for that. Only a hunch and some minors details that don't fit. Since usually is not a good idea to talk nonsense without any shred of evidence, this is just a wild speculation on a very low probability event.

[Tulpen]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

He's NOT clueless. He's playing clueless so as to avert blame. Easier (and less crimial culpability) if you claim " I didn't know" vs I Knew and did it willingly.

Besides, I was looking for something like this.

It's a play right out of Atlas Shrugged, Francisco D'Anconia has had all these pigs buy into this mexican mine. They trust him because he has a reputation as a exceptional capital manager. He then pull's the rug out from underthem and says he's really an incompetent idiot playboy and the shares in the mine plunge! Greenspan has just done the exact same thing (minus the playboy thing) for the US financial system. (As he intended, I think)

What I DON'T think is up for discussion is that Greenspan has trashed the US financial system. What was his motivation? That is a different matter.

You have my opinion. What's yours?

Note that Greenspan is only the poster boy, there are other idiots in that institution.

Remember this idiot:

"If we all join hands and go buy a new SUV, everything will be all right. Preferably a Navigator.... just go out and buy something."
- Dallas Federal Reserve President Bob McTeer, October 11, 2001.

[tsetsefly]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

He's NOT clueless. He's playing clueless so as to avert blame. Easier (and less crimial culpability) if you claim " I didn't know" vs I Knew and did it willingly.

Besides, I was looking for something like this.

It's a play right out of Atlas Shrugged, Francisco D'Anconia has had all these pigs buy into this mexican mine. They trust him because he has a reputation as a exceptional capital manager. He then pull's the rug out from underthem and says he's really an incompetent idiot playboy and the shares in the mine plunge! Greenspan has just done the exact same thing (minus the playboy thing) for the US financial system. (As he intended, I think)

What I DON'T think is up for discussion is that Greenspan has trashed the US financial system. What was his motivation? That is a different matter.

You have my opinion. What's yours?

reputation. I remember Ron Paul saying he asked Greenspan in private if he still believed what he wrote about the Gold Standard in "Capitalism the Unknown Ideal", the answer was yes...

When the question was asked in public, he said no...

Greenspan is not stupid he knew very well what he was doing, he just didnt want to be the fed chairman to rain on the parade. And I think he never though the charade would come crashing down so fast after he left.

As for him saying more regulation is needed, how incredulous. He was the guy supplying them gas to put on the fire and now he says it was lack of regulation? that they acted irresponsibly?, look who is talking...

[swgprop]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

You have my opinion. What's yours?

Front man for the New World Order?

[ASH]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

Front man for the New World Order?

Given Greenspan's age, he is unlikely to be around long enough to profit much from the New World Order. Anything Greenspan says today should be viewed in the context of his limited time horizon -- it could be a deathbed confession, or it could be an attempt to defend his legacy. I don't think it is as likely to be about the future as the past.

[rj1]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

This a very interesting question and the answer may be extremely counterintuitive. Let's say I would not be completely surprised if Allan Greasepan is the ultimate Maestro and he will go down in history as the man who brought down singlehandedly the whole corrupt financial system by destroying it from the inside. But I don't have yet any proof for that. Only a hunch and some minors details that don't fit. Since usually is not a good idea to talk nonsense without any shred of evidence, this is just a wild speculation on a very low probability event.

For starters, it breaks Occam's Razor.

Also, "never attribute to malice what can be easily attributed to stupidity".

[ASH]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

... this is just a wild speculation on a very low probability event.

I love it. Alan Greenspan as a Randist, hard-money Howard W. Campbell, Jr., toiling in secret to bring the monstrous system down from inside, but despised as a turn-coat by his own side.

Reminds me of Aaron Krowne's observation in What Really Happened in 1995? that Greenspan initially seemed to be following a defacto gold standard, before he abruptly abandoned it. Clearly, he came to realize that even if he managed the Fed responsibly, his term would be finite, and the potential for abuse would persist. The only possible way to save America from the Federal Reserve would be to break it himself!

Okay... I'm being kind of playful. I agree that there's no particular evidence for this. However, I think it makes a great story!

[BiscayneSunrise]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

The discussion about ideology at the end of the tape sums it up succinctly.

Waxman was trying to pin Greenspan down on the flaws in his free market ideology. Greenspan says everyone must have an ideology to act as a framework to make decisions. Greenspan said he expected markets to act in their self interest and was surprised when they didn't

I know lots of people like Greenspan: Ivy league pedigree, Park Avenue types, masters of the universe, everything has always gone their way, partly because the FIRE economy was unstoppable for so long and partly because they used the force of their will to make things go their way. When asked about the possible Black Swan event, they acknowledged the possibility but scorned any real concern. To them, events spinning out of control were totally out of the realm of their possibilities and were the concern of small minded doomers.

Remember Dr. John and Fat Tony from Black Swan? People like Greenspan are the Dr. Johns of the world. The ones I know, are just now, slowly and bareley awakening to the realization of what is happening. Conversely, the Fat Tony's I know, are sitting comfortably waiting to swoop in.

[flintlock]

Re: Alan Greenspan: Markets Need Regulation to Function Properly

It's real simple. Greenspan enjoyed all the attention he was getting. He didn't want it to end. He knew his actions would eventually come home to roost, only he hoped it would hold off until he was gone. For years he was treated like a God who could do no wrong. It went to his head. I don't think it was anything other than simple hubris. The fact that a lot of his friends probably were getting rich off it didn't hurt either.