waxman blames "genius" greenspan for sub prime

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waxman blames "genius" greenspan for sub prime

Postby bigearth » Thu Oct 23, 2008 12:19 pm

this "genius" should just STFU and retire somewhere quiet..

Financial crisis 'like a tsunami'

Image
Mr Greenspan headed the Fed until 2006

Former Federal Reserve chairman Alan Greenspan has called the recent turmoil in the global financial markets a "once in a century credit tsunami".

Speaking before Congress, Mr Greenspan, who stood down as Fed chairman in 2006 after 18 years, said he expected the US unemployment rate to jump sharply.

He added that recovery in the US housing market was "many months" away.

Returning to the crisis in the banking sector, he said he had been left in "a state of shocked disbelief".

Mr Greenspan made the comments to the House of Representatives Committee on Oversight and Government Reform.

Committee chairman Henry Waxman, a Democrat, suggested that Mr Greenspan had added to the problem by rejecting calls for the Fed to regulate the sub-prime sector.

"The list of regulatory mistakes and misjudgments is long," Mr Waxman said.


http://news.bbc.co.uk/1/hi/business/7687101.stm
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Postby bigearth » Fri Oct 24, 2008 8:00 am

ain't this the admission of the moment?!?!??!

‘I made a mistake,’ admits Greenspan

By Alan Beattie and James Politi in Washington

Published: October 23 2008 17:37 | Last updated: October 23 2008 21:26

Alan Greenspan, the former Federal Reserve chairman, said on Thursday the credit crisis had exceeded anything he had imagined and admitted he was wrong to think that banks would protect themselves from financial market chaos.

“I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” he said.


In the second of two days of tense hearings on Capitol Hill, Henry Waxman, chairman of the House of Representatives, clashed with current and former regulators and with Republicans on his own committee over blame for the financial crisis.

Mr Waxman said Mr Greenspan’s Federal Reserve – along with the Securities and Exchange Commission and the US Treasury – had propagated “the prevailing attitude in Washington... that the market always knows best.”

Mr Waxman blamed the Fed for failing to curb aggressive lending practices, the SEC for allowing credit rating agencies to operate under lax standards and the Treasury for opposing “responsible oversight” of financial derivatives.

Christopher Cox, chairman of the Securities and Exchange Commission, defended himself, saying that virtually no one had foreseen the meltdown of the mortgage market, or the inadequacy of banking capital standards in preventing the collapse of institutions such as Bear Stearns.

Mr Waxman accused the SEC chairman of being wise after the event. “Mr Cox has come in with a long list of regulations he wants... But the reality is, Mr Cox, you weren’t doing that beforehand.”

Mr Cox blamed the fact that congressional responsibility was divided between the banking and financial services committees, which regulate banking, insurance and securities, and the agriculture committees, which regulate futures.

“This jurisdictional split threatens to for ever stand in the way of rationalising the regulation of these products and markets,” he said.

Mr Greenspan accepted that the crisis had “found a flaw” in his thinking but said that the kind of heavy regulation that could have prevented the crisis would have damaged US economic growth. He described the past two decades as a “period of euphoria” that encouraged participants in the financial markets to misprice securities.

He had wrongly assumed that lending institutions would carry out proper surveillance of their counterparties, he said. “I had been going for 40 years with considerable evidence that it was working very well”.

Republicans on the committee dissented from some of the Democratic attacks, and said the government-backed housing entities Freddie Mac and Fannie Mae had also been to blame.

“It wasn’t deregulation that allowed this crisis,” said Tom Davis, the senior Republican on the committee. “It was the mish-mash of regulations and regulators, each with too narrow a view of increasingly integrated national and global markets.”

Mr Greenspan said that when, as Fed chairman, he declined to advocate regulating credit default swaps – derivatives that have been blamed for worsening the crisis – he had been following the will of Congress.

Copyright The Financial Times Limited 2008

http://www.ft.com/cms/s/0/aee9e3a2-a11f ... 07658.html
. is it a wise man, who knows that he is not wise
. it's good to have cynicism but not be cynical
. the more truth you live with, in your life, the stronger you are
. intelligence is merely an attitude to knowledge and learning
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Postby bigearth » Fri Oct 24, 2008 8:02 am

bigearth wrote:Mr Greenspan said that when, as Fed chairman, he declined to advocate regulating credit default swaps – derivatives that have been blamed for worsening the crisis – he had been following the will of Congress.

er WAT?!

now he's trying to blame congress for his monumental fuck up???
. is it a wise man, who knows that he is not wise
. it's good to have cynicism but not be cynical
. the more truth you live with, in your life, the stronger you are
. intelligence is merely an attitude to knowledge and learning
bigearth
 
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Postby bigearth » Sat Oct 25, 2008 9:21 pm

the "genius" speaks!

Greenspan admits to 'flaw' in ideology

By Alan Beattie and James Politi in Washington

Published: October 24 2008 03:00 | Last updated: October 24 2008 03:00

Alan Greenspan, the former Federal Reserve chairman, said yesterday the credit crisis had been "much broader than anything I could have imagined".

Mr Greenspan admitted that there had been a "flaw" in his governing ideology.

Questioned by Henry Waxman, chairman of the House of Representatives oversight committee, the former Fed chief said he had "found a flaw" in his thinking. "I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders," he said.

Mr Greenspan described the past two decades as a "period of euphoria" that encouraged participants in the financial markets to misprice securities, and accepted he had been wrong to assume that lending institutions would carry out proper surveillance of their counterparties. "I had been going for 40 years with considerable evidence that it was working very well," he said. "The whole intellectual edifice, however, collapsed in the summer of last year."

In the second of two days of packed hearings in which lawmakers and regulators clashed over blame for the financial crisis, Mr Waxman lambasted what he called "the prevailing attitude in Washington . . . that the market always knows best."

He blamed the Federal Reserve for failing to curb aggressive lending practices, the SEC for allowing credit rating agencies to operate under lax standards and the Treasury for opposing "responsible oversight" of financial derivatives.

Mr Greenspan said that when, as Fed chairman, he declined to advocate regulating credit default swaps - financial derivatives that have widely been blamed for worsening the crisis - he had been following the will of Congress.

Christopher Cox, chairman of the Securities and Exchange Commission, said virtually no one had foreseen the meltdown of the mortgage market, or the inadequacy of banking capital standards in preventing the collapse of institutions such as Bear Stearns.

Mr Waxman accused the SEC chairman of being wise after the event. "Mr Cox has come in with a long list of regulations he wants . . . But the reality is, Mr Cox, you weren't doing that beforehand."

Mr Cox blamed the fact that congressional responsibility was divided between the banking and financial services committees, which regulate banking, insurance and securities, and the agriculture committees, which regulate futures. "This jurisdictional split threatens to for ever stand in the way of rationalizing the regulation of these products and markets," he said.

Republicans on the committee dissented from the Democratic leadership's attacks on federal agencies.

"It wasn't deregulation that allowed this crisis," said Tom Davis, the senior Republican on the committee. "It was the mish-mash of regulations and regulators, each with too narrow a view of increasingly integrated national and global markets." At a separate hearing before the Senate banking committee yesterday, Neel Kashkari, the official responsible for the $700bn US financial rescue plan, had to defend suggestions by legislators that the Treasury was not being aggressive enough in persuading banks to deploy government money.

I am especially concerned that we're feeding them too much dessert and not making them eat enough of their vegetables," said Chuck Schumer of New York, a senior member of the committee.

Chris Dodd, the Democratic chairman, asked what "guarantees" Treasury could extract from lenders.

Mr Kashkari responded that the Treasury did not want to "micromanage" the banks and said there were bans on increases in dividend payments and share buy-backs.

Copyright The Financial Times Limited 2008

http://www.ft.com/cms/s/0/2d8b550e-a163 ... 07658.html
. is it a wise man, who knows that he is not wise
. it's good to have cynicism but not be cynical
. the more truth you live with, in your life, the stronger you are
. intelligence is merely an attitude to knowledge and learning
bigearth
 
Posts: 234
Joined: Sun Sep 07, 2008 8:44 am
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Postby bigearth » Sat Oct 25, 2008 9:22 pm

p.s. er, the agriculture committees regulate futures?!

wtf..
. is it a wise man, who knows that he is not wise
. it's good to have cynicism but not be cynical
. the more truth you live with, in your life, the stronger you are
. intelligence is merely an attitude to knowledge and learning
bigearth
 
Posts: 234
Joined: Sun Sep 07, 2008 8:44 am
Blog: View Blog (0)


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