Greenspan "shocked" at credit system breakdown (Stuned, just stuned!)

Reuters on Yahoo ^ | 10/23/08 | Mark Felsenthal

[NormsRevenge]

WASHINGTON (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan told Congress on Thursday he is "shocked" at the breakdown in U.S. credit markets and said he was "partially" wrong to resist regulation of some securities.

Despite concerns he had in 2005 that risks were being underestimated by investors, "this crisis, however, has turned out to be much broader than anything I could have imagined," Greenspan said in remarks prepared for delivery to the House of Representatives Committee on Oversight and Government Reform.

"Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief," said Greenspan, who stepped down from the Fed in 2006.

Banks and other financial institutions need public support, such as the recently approved $700 billion bailout package, to avoid a serious reduction in credit, he said.

While Greenspan was once hailed as one of the most accomplished central bankers in U.S. history, the low interest rates during his final Fed years have been blamed for fuelingthe housing bubble and eventual crash that touched off the current financial crisis.

The former Fed chair said stabilization of U.S. housing markets -- a necessary precondition for the economy to heal -- is "many months in the future." He said he expected the unemployment rate to jump.

[NormsRevenge]

"I wuz stuned. Andrea had to break out the smelling salts."

The Zero down tiny payments NO Valid ID required mortgage wasn't Greenspan's fault.

[Melinda]

Let’s hope he was just “stunned”, not stuned.

[Madeleine Ward]

This was all a big fix.

I believe NO ONE. No one.

[NormsRevenge]

The Congre$$ional Inquests continue.

I woke to see Waxman at the mic on CSpin..

suddenly the 7th century looks pretty good about now..

if we’re gonna have mob rule and a thugocracy here, that is.

[Question Liberal Authority]

How does he feel about the breakdown of NBC News?

[Porterville]

It's not the mortgages- it is the derivative markets based on bad loans. Mortgages make up a minor portion of the total problem.

It is the dumb-ass dderrivative traders that sold out our nation.

[NormsRevenge]

I wonder if Al and Andrea were on Angelo's list at CountryWide?

Former Chairman of the Federal Reserve Alan Greenspan testifies
before the House Oversight and Government Reform Committee
on Capitol Hill in Washington October 23, 2008.
(Kevin Lamarque/Reuters)

[dirtboy]

The Zero down tiny payments NO Valid ID required mortgage wasn't Greenspan's fault.

The Boston Fed agressively promoted lower mortgage qualifying standards in the late 1990s. Greenspan could have overruled them. He agreed with the concept from what I can see.

[mosesdapoet]

I guess he doesn’t talk to his wife Andrea Mitchell because she’s been covering up all of Obama’s miscreancies, maybe there’s a divorce in the offing.http://www.theusmat.com/home.htm

[Boiling Pots]

Here comes a whole host of new regulations...written by the likes of Barney Fag, Pelosi, and all the other marxists in Congress.

[AngelesCrestHighway]

I’m sure you are Greenie!....(sarc. extreme)

[fightinJAG]

What a clown.

[Melinda]

Gee, isn’t a chief derivative architect, Larry Summers, one of Obama’s top picks for his senior economic advisor? Sure, he’ll build up another house of cards to save us all.

[NormsRevenge]

The Boston Fed agressively promoted lower mortgage qualifying standards in the late 1990s. Greenspan could have overruled them. He agreed with the concept from what I can see.

I read somewhere he was for them before he was against them. I don’t think he was gung ho, but .. people who say
NO to dems usually pay for it... The Clinton Legacy..

[Attention Surplus Disorder]

No, but post-9/11 1% interest rates incented a worldwide frantic search for yield and real estate frenzy which were quite fundamental to the massive gearing-up of financial instruments and institutions which have now turned into a flaming hell of debt and default. And that was him, only him. The guy who (twice) couldn’t tell a bubble when we were in one (stock market 1998-2000 and RE mkt 2004-2005) and who favored the dominance of Wall St. financial manipulations over the continuance of the “real” productive economy.

Five years ago, I predicted Gspan would go from annointed benevolent savior of the world to smelly goat and I was derided for it. As much as I detest Paulson and Bernankes’ moves to date, I believe they are being astoundingly clever in dealing with the horrific dislocations of the Greenspan era. Notwithstanding AGs’ protestations, if there is a single cause of the morass we are probably entering, it is him. No, he’s not 100% responsible for it, but minimally 2/3rds responsible, IMO.

[GQuagmire]

Paging Captain Renault........

[Tarpon]

The consequences of free money just stunned me, said the chairman of the banking system. How cool is that, I never knew if we gave it away for free everybody would want some free money.

Why work when the pies are free — Now you know, so you won't be stunned when the free pies show up.

Outtake question, how stupid do people have to be, give me an answer in education level of government school grades, before they slap their forehead and say to themselves, boy is this guy dumb, I hope we never trust him with an important job.

[RobinOfKingston]

... he is "shocked" at the breakdown in U.S. credit markets ...

Let me guess. This is not the "US credit market" he knew!

[vietvet67]

[ncpatriot]

I agree totally.