Greenspan: "Don't Blame Me (or The Fed) for the Economy"

[Matt Collins]

http://abcnews.go.com/Business/alan...handling-subprime-mortgages/story?id=10309017


Trying to look back and assess what he should have done differently, Greenspan said, is "a futile activity."

Greenspan said Congress deserved part of the blame for the subprime mortgage crisis because lawmakers would have disapproved if the Fed had cracked down on subprime lending in the midst of a booming housing market.



"If the Fed as a regulator had tried to thwart what everyone perceived as a fairly broad consensus that the trend was in the right direction, homeownership was rising and that was an unmitigated good, then Congress would have clamped down on us," Greenspan said.



He added, "There's a lot of amnesia that's going on."



Greenspan was once regarded as a financial wizard but is now blamed by some for the crisis. In recent weeks he has publicly campaigned to restore his tarnished reputation.



In an interview with ABC News' Jake Tapper on "This Week," Greenspan said the financial world failed to put in place adequate protections for risk-taking gone wrong.

 

[heavenlyboy34]

I heard this on the radio, and I lol'ed at Alan

 

[sparat1k]

So is the main reason the super-low rates during 2001-2005?

(haven't read ron paul's book yet)

 

[sb10]

http://abcnews.go.com/Business/alan...handling-subprime-mortgages/story?id=10309017

Trying to look back and assess what he should have done differently, Greenspan said, is "a futile activity."

He is really saying "There's nothing here to see folks, just move along!"

What a coward. Peter Schiff said it well, "Greenspan, Bernie Madoff 'fessed up, why can't YOU?!?"

Greenspan doesn't know when to stop. Now he is saying "I was right 70% of the time." As if this fabricated probability is going to give him credibility.

Greenspan: "I was right 70% of the time"

 

[bobbyw24]

Greenspan: Congress Pushed Fed on Housing Boom

Former Federal Reserve Chairman Alan Greenspan chastised critics Wednesday by pointing out that Congress pushed the U.S. central bank to make sure lending to poorer Americans kept rising in the 2000s.


"If the Fed as a regulator had tried to thwart what everyone perceived as a fairly broad consensus that the trend was in the right direction, homeownership was rising and that was an unmitigated good, then Congress would have clamped down on us," he told a questioner at a congressionally appointed commission investigating the financial crisis.

"There's a presumption that the Federal Reserve's an independent agency, and it is up to a point, but we are a creature of the Congress and if ... we had said we're running into a bubble and we need to retrench, the Congress would say 'we haven't a clue what you're talking about'," Greenspan said.

Greenspan told the committee that making it easier for poorer Americans to get mortgages didn't push the country into crisis, but Wall Street's drive to package the loans into opaque securities helped do so.

He renewed a defense of his own legacy by denying the U.S. central bank helped inflate housing prices with excessively low interest rates.

"The house price bubble, the most prominent global bubble in generations, was caused by lower interest rates but...it was long-term mortgage rates that galvanized prices, not the overnight rates of central banks, as has become the seeming conventional wisdom," Greenspan said.


Much of Greenspan's testimony retraced the ground that he trod in a scholarly defense of Fed policy in the early 2000s three weeks ago at the Brookings Institution. Many now blame prolonged low official rates from 2001 to 2003 for helping set U.S. house prices on fire and contributing to a slackening in standards for loans by banks and rating agencies.

"Let me respectfully restate that, in my judgment, the origination of subprime mortgages—as opposed to the rise in global demand for securitized subprime mortgage interests—was not a significant cause of the financial crisis," Greenspan said.

He repeated that geopolitical events including the fall of the Soviet Union and the rise of China helped boost the global workforce, pushing up growth and creating a global savings glut that drove down long-term interest rates.

Greenspan, who led the Fed from 1987 to 2006, conceded that regulators and others miscalculated the risks that were involved in a a buildup of U.S. housing prices in the 2000s.

"In the growing state of euphoria, managers of financial institutions, along with regulators including but not limited to the Federal Reserve, failed to comprehend the underlying size, length and potential impact" of market risks, he said.


Rating agencies that assigned risk ratings to securities underlying rising mortgages issuance "proved no more adept at anticipating the onset of crisis than the investment community at large," Greenspan added.

He said a proliferation of securitized U.S. subprime mortgages was the "immediate trigger" of the crisis and said government-owned enterprises Fannie Mae and Freddie Mac helped drive that process.


http://www.cnbc.com/id/36216203?__source=RSS*tag*&par=RSS

 

[DapperDan]

What a hack.

 

[lester1/2jr]

and the media has no idea what he's talking about so they don't call him on it

 

[wgadget]

Shouldn't these criminals be subject to the PATRIOT ACT?

 

[Vessol]

Shouldn't these criminals be subject to the PATRIOT ACT?

Washington D.C would be a lonely ghost town for the most part if it was enforced on politicians.

 

[michaelwise]

The Federal Reserve and Alan Greenspan engineered the greatest financial catastrophe in history of the planet. The Federal Reserve must be audited and abolished!

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