Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB
Silver's Relationship with Gold Reaching Historical Extremes - 16th Sep 18
Emerging Markets to Follow and Those to Avoid - 16th Sep 18
Investing - Look at the Facts to Find the Truth - 16th Sep 18
Gold Stocks Forced Capitulation - 15th Sep 18
Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - 15th Sep 18
Trading The Global Future - Bad Consequences - 15th Sep 18
Central Banks Have Gone Rogue, Putting Us All at Risk - 15th Sep 18
Gold Price Seasonal Trend Analysis - 14th Sep 18
Growing Number of Small Businesses Opening – and Closing – In the UK - 14th Sep 18
Gold Price Trend Analysis - Video - 14th Sep 18
Esports Is Exploding—Here’s 3 Best Stocks to Profit From - 13th Sep 18
The Four Steel Men Behind Trump’s Trade War - 13th Sep 18
How Trump Tariffs Could Double America’s Trade Losses - 13th Sep 18
Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - 13th Sep 18
Trading Cryptocurrencies: To Win, You Must Know Where You're Wrong - 13th Sep 18
Gold, Silver, and USD Index - Three Important “Nothings” - 13th Sep 18
Precious Metals Sector On a Long-term SELL Signal - 13th Sep 18
Does Gambling Regulation Work - A Case Study - 13th Sep 18
The Ritual Burial of the US Constitution - 12th Sep 18
Stock Market Final Probe Higher ... Then the PANIC! - 12th Sep 18
Gold Nuggets And Silver Bullets - 12th Sep 18
Bitcoin Trading - SEC Strikes Again - 12th Sep 18

Market Oracle FREE Newsletter

Trading Any Market

Greenspan Oscar Winning Financial Crisis Inquiry Commission Testimony

Politics / Central Banks Apr 10, 2010 - 02:10 AM GMT

By: Mike_Whitney

Politics

Best Financial Markets Analysis ArticleAlan Greenspan's performance before the Financial Crisis Inquiry Commission was a real Oscar winner. At no time, was the ex-Fed chairman in trouble, and he was able to showcase the full repertoire of fake emotions for which he is renowned. He was alternately condescending, professorial, combative, engaging, and acerbic. It was vintage Greenspan from start to finish; the tedious jabber, the crusty rejoinders, the endless excuse-making.  At 80, Maestro still hasn't lost his touch. No one laid a glove on him, which is precisely the problem.


It's galling that, after everything that's taken place, Greenspan is still treated like royalty; still given a platform so he can run-circles around his critics and make them look like fools. That's not what the public wanted, another playful sparring-match with Chairman Flim-flam. They wanted to see him grilled, interrogated, badgered, threatened and humiliated. And they want to see some trifling sign of remorse for the ruin he's  brought on the country. But there was no remorse; no restless squirming, no flickering look of self-doubt, no sudden outburst of regret. Nothing at all. Just the brazen buck-passing of a self-admiring old man trying to pluck his reputation from the ashheap. 

No one person is more responsible for the financial crisis than Alan Greenspan. He can say whatever he likes, but the 8.5 million people who spend their days shuffling in unemployment lines, have him to thank. And that's doubly true for the 300,000 families who lose their homes every month or the millions of people now scrimping by on food stamps. They can blame Maestro for the mess they're in.

In his testimony, Greenspan blamed subprime securitization, Fannie Mae and Freddie Mac, the fall of the Berlin Wall, too much saving in China etc. etc. etc. Everyone is to blame; everyone except Greenspan that is, the Teflon Fed chief.

Greenspan claims he never saw the housing bubble. It's a familiar refrain which goes something like this: "Bubble?" "What bubble?" "Who saw a bubble?" "Who said anything about a bubble?" "What could we do?" "How could we stop it?" "Who could have known?"

But then in the next breath, he admits he saw the bubble, but didn't think he could persuade congress to do anything about it. Go figure? Here's the quote:

GREENSPAN: "In that midst of period of expanding home ownership... Had we said we're running into a bubble and we'll have to start to retrench, Congress would say, we haven't a clue what you are talking about."

 Interesting, isn't it? Greenspan has so many excuses, he let's the committee decide which ones sound believable. It's like an exam that's "multiple choice." And, notice how he shifts the blame onto congress now. Where's your pride, man? 

The best exchange of the day was between Greenspan and Brooksley E. Born, the former commodities regulator who tried to stop Greenspan and Co. from deregulating derivatives, but ultimately failed. Born lost the battle and eventually her job. Here's an extended clip from the hearings which shows Greenspan's support for the lethal financial instruments which triggered the crisis.

Brooksley Born:  "In your recent book you describe yourself as an outlier in your libertarian opposition to most regulation. Your ideology has essentially been that financial markets, like the OTC derivatives market, are self regulatory and that government regulation is either unnecessary or harmful. You’ve also stated that, as a result of the financial crisis, you have now found a flaw in that ideology.

You served as chairman of the Federal Reserve Board for more than 18 years, retiring in 2006, and became, during that period, the most respected sage on financial markets in the world. I wonder if your belief in deregulation had any impact on the level of regulation over the financial markets in the United States and in the world. You said that the mandates of the Federal Reserve were monetary policy, supervision and regulation of banks and bank holding companies, and systemic risk. You appropriately argued that the role of regulation is preventative.

But, the Fed utterly failed to prevent the financial crisis.

The Fed and the banking regulators failed to prevent the housing bubble. They failed to prevent the predatory lending scandal. They failed to prevent our biggest banks and bank holding companies from engaging in activities that would bring them to the verge of collapse, without massive taxpayer bailouts. They failed to recognize the systemic risk posed by an unregulated over-the-counter derivatives market and they permitted the financial system and the economy to reach the brink of disaster.

You also failed to prevent many of our banks from consolidating and growing into gigantic institutions that are now today too big and/or too interconnected to fail. Didn’t the Federal Reserve system fail to meet its responsibilities – failed to carry its mandate?" 

Greenspan replied, “The notion that somehow my views on regulation were predominant and effective at influencing the Congress is something you may have perceived. But it didn’t look that way from my point of view.”

  So, Greenspan expects us to believe that the reason he refused to regulate the OTC derivatives markets, was because no one would have paid attention to him? Is that it? That the congress would have regarded "The Greatest Central Banker of all Time" as some piddling, paper-shuffling bureaucrat who could be dismissed with a wave of the hand?  What nonsense. What a shameful, cowardly man. Instead of regret or contrition, all he thinks about is covering his ass.

By Mike Whitney

Email: fergiewhitney@msn.com

Mike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.

© 2010 Copyright Mike Whitney - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Mike Whitney Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules