Skip to comments.Brooksley Born Excoriates Alan Greenspan: “You Failed”
Posted on 04/07/2010 5:53:20 PM PDT by dangthis
"At todays Financial Crisis Inquiry Commission hearing, Brooksley Born, the former head of the Commodity Futures Trading Commission, declared Alan Greenspans tenure at the Federal Reserve an unmitigated failure to his face. Greenspan accords a certain degree of respect on Capitol Hill, despite Borns accurate take on his many failures, and so this outburst was highly unusual and gratifying.
Born, who pushed to strictly regulate derivatives under the Clinton Administration, but lost the battle to, among other people, Alan Greenspan, told the former Federal Reserve chair that his agency failed to prevent housing bubble, failed to prevent the predatory lending scandal, failed to prevent the activities that would bring the financial system to the verge of collapse.
You failed to prevent many of our banks from consolidating and growing to a size that are now too big or too interconnected to fail, Born added. She added that Greenspans views on deregulation, which he took as an article of faith, contributed to the Federal Reserves failure in delivering on its mandate."
(Excerpt) Read more at news.firedoglake.com ...
I can't believe Greenspan attempted to white wash this.
Remember who he's married to.....a profession whitewasher.
"..Born was particularly concerned about swaps, financial instruments that are traded over the counter between banks, insurance companies or other funds or companies, and thus have no transparency except to the two counterparties and the counterparties' regulators, if any. CFTC regulation was strenuously opposed by Federal Reserve chairman Alan Greenspan, Treasury Secretaries Robert Rubin and Lawrence Summers. On May 7, 1998, former SEC Chairman Arthur Levitt joined Rubin and Greenspan in objecting to the issuance of the CFTCs concept release. Their response dismissed Born's concerns off-hand and focused on the possibility that CFTC regulation of swaps and other OTC derivative instruments would increase legal uncertainty of such instruments, potentially creating turmoil in the markets, and reducing the value of the instruments. Further concerns voiced were that the imposition of new regulatory costs would stifle innovation and push transactions offshore..."
Credit Default Swaps were huge in the meltdown.
Anyone who marries Andrea Mitchell is a failure.
Greenspan left the Fed at the beginning of 2006. He is the favorite scapegoat of the Democrats because he advocated deregulation. The current financial mess is not a result of deregulation, but of government meddling in the economy. The Democrats want an excuse to meddle even more, hence their toadies are attacking anyone that they can brand as market oriented. Greenspan was not omniscient, and there is a limit to how much the Fed chairman can do to compensate for the fraud and thievery committed by the Democrat gang.
He pretended that he did not stand in the way of regulating the over the counter derivatives market when it was first suggested. In fact he killed it during the Clinton administration. He attempted to rewrite history. Trust me on this story. Greenspan just put blood in the water today. The true story of what happened will continue to come out. It was the over the counter derivatives that gave Freddie Mac & Fannie Mae their power.
Try history, facts, and honesty for useful characteristics when forming an opinion.
“Government itself, especially Barney Frank, were more to blame than Alan Greenspan”
You can be brought along for the ride.
It failed during the Clinton Administration first. That was that moment in history when the mold was cast to bring everything down. The warning was clear, published in fact, and the congress created a bill that killed regulation once and for all ack then. In fact it’s still the law today. Don’t you find it funny that Chris Dodd and Barney Frank went around blaming the Republicans for not regulating it? I find that very funny. That takes a real set of them to hang their own failings on the opposition. But that’s typical.
Sorry but you are just following a party line opinion from somewhere.
“The current financial mess is not a result of deregulation, but of government meddling in the economy.”
No, that’s the red herring.
It’s the over the counter derivatives and the housing bubble. The derivative trading allowed the creation of tradeable financial instruments that held mortgages in split risk forms of speculative market trading. Everyone was getting rich off the rising values of speculative real estate ownership. While it was going up it was OK. As soon as there were more properties for sale than buyers to buy them then the balloon burst. It always happens that way. All you have to do is to honestly look at the history of the housing market. BTW, I got the Greenspan memo that the housing bubble was about to burst. I knew there was going to be a collapse back in 2005. I’m a builder. I know things.
Watch the Frontline piece. I guarantee it will be worth your time and bandwidth.
No. If you can’t summarize it, then I assure you it will be not.
You’re just lazy and want to be spoon-fed then.
“The derivative market was the bottom line that gave the government enterprises the capability to sell off the bad loans after they purchased them from the banks. Its really a funny kind of Ponzi scheme. They put blinders on the watchdogs and then went into business selling bad paper. All it took was a breathing bag of skin that could successfully sign a loan application. If dogs and cats could have signed the loans they would have done that too. If they could not have transfered those bad loans somewhere then they could not have screwed us. But they had that covered. They made a law preventing any government agency from monitoring that market. That was a Clinton administration & congress that did that. Remember how home ownership was the big achievement? You have to love our government when it does what it does the best. It took suckers to take out the loans and lending institutions like the two government enterprises to create this freight train disaster.”
The regulation that caused this was making sure that the over the counter derivatives market remained in the dark. As long as a house could be purchased and then sold six months to a year later everyone was riding that gravy train.
If you dump a truck full of gold nuggets in a stream and then tell anyone that could crawl that they only needed to go down and jump in then guess what happens. It was a Ponzi Scheme. The government makes Bernie Madoff look like a saint compared to this.
Just look at those jack asses telling the world it was because of deregulation. It was their deregulation and Greenspan just met his own Waterloo.
Frankly, this particular capitalist needs castigation. This is where the overblown Libertarian economic nonsense meets the real world. The government isn’t the source of all of our problems. Sometimes it’s us.
The world isn’t that simplistic. Ayn Rand’s heroic kids playing pirates is a fun fantasy. When it leaves the bedroom, though, it ceases to be cute. You might want to try this on. This is a real good site for separating the truth from the myths. Another good one is the Market Ticker.
parsy, who wishes things really were that simple
Greenspan, as head of the government central bank Fed, was not acting like a “capitalist.” He was acting like a politician and motivate by political considerations.