Tuesday, September 18, 2007

More hating on Greenspan

There's a definite lack of love towards Greenspan:

"Watching Chairman Greenspan comment on his handiwork in speeches and in his memoirs, and rake in the six-digit speaking fees all the while, we can't help but ponder the victims of the subprime debacles, especially outside Wall Street.  Like the individual US home owner who was unlucky enough to get a subprime loan (which ended up inside some hideous CDO) and now faces foreclosure.  Or the shareholders of UK mortgage bank Northern Rock, which was rescued by the Bank of England over the weekend and is likely to be sold.  Or the investors in dozens of other mortgage companies which have failed in the past six months."

Not that the blame goes to him alone.  He just loaded the gun—the mortgage holders aimed it at their own foot and pulled the trigger.  Repeatedly, in many cases.

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Greenspan on the housing bubble runup

"While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late."  "I really didn’t get it until very late in 2005 and 2006."

WTF, Greenspan? You were handing out bales of cash to anything that had a pulse. That money had to go somewhere.  Inflation of the consumer price index showed that it wasn't being widely and evenly distributed to everyone.  Ergo, the money was either being put on a shelf somewhere, or a few specific markets had to be massively inflating.

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