On Thu, Oct 23, 2008 at 10:21 AM, Sandwichman <[EMAIL PROTECTED]> wrote: > > "Greenspan said that he had found 'a flaw in the model that I > perceived is the critical functioning structure that defines how the > world works.'" > > Gosh. A flaw? Who would have guessed?
Well, it is a grudging first step towards intellectual honesty. His testimony today is quite a comedown for the formerly great Maestro: http://www.bloomberg.com/apps/news?pid=20601087&sid=a_IH5AnCyOm4 -----------------------------------------snip Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed. ``Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.'' Greenspan said he was ``partially'' wrong in opposing regulation of derivatives and acknowledged that financial institutions didn't protect shareholders and investments as well as he expected. [...] The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.'' Today Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.'' ``You were advised to do so by many others,'' he told Greenspan. ``And now our whole economy is paying the price.'' Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman. [...] Greenspan reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses. The ``breakdown'' was clearest in the market where securities firms packaged home mortgages into debt sold on to other investors, he said. -raghu. -- Confucius say, dirty book rarely dusty. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
