Greenspan "shocked" at credit system breakdown

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 that he expects the unemployment rate to jump.

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,” he said.

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

It’s not “shocking” to those of us who are aware of what greed does. For as “smart” as he is, he has no clue to the reality of humans and sin.

Yeah right. He was one of the culprits in this whole debacle. In addition, he has been fueling the scaremongering ever since he was kicked out of the Fed.

I watched Dr. Greenspan on CSPAN testifying and the thing that shocked me was how anti-Government regulation he was. In fact, he went on to say that the managers of lending institutions knew more than the regulators. What? It’s my job to keep tabs on them but if I’m not a Bank Jedi I’m not able to use their Jedi Powers of wise lending and risk management?

But Dr. Greenspan was right in that, had they played by the rules, the system would have worked, but unrealistic (artificially inflated) valuations… Yeah, and this from world-class institutions who we all know did know what they were doing.

Somebody has got to watch over the people’s money and the foxes should not be in charge of the hen house.


What is the cause of the “financial crisis”?

A. The American illuminati.

Since Greenspan is a member, he has to go on TV and express shock.

Libertarianism isn’t much when it comes to the real world.

Welcome to reality, Mr. Greenspan!:slight_smile:

It was not caused by some secret society or some ism, but by greed.


He’s shocked because he subscribed totally to supply side economics and the idea that the market is almost supernaturally efficient and self-regulating.

In so much as the market is made up of fallible humans, it is capable of being deceived and even of self-delusion.

Sadly, since God frequently declines the invitations to be the central economic planner and overall dictator, the free market is still the least bad option available. The problem with giving too much power to regulators is that they stifle growth and the power of their position makes corruption of the office inevitable, which further stifles growth.

Perhaps instead of regulation oversight, what we need is a more robust prosecution of financial crimes. Anybody in jail over this yet? There’s your problem.

Regulation is bad? The old - please ignore the man behind the curtain? That’s why they have police officers.

The new Fed Chairman has already testified to “opaque” deals being made on Wall Street. Perhaps burying a coffee can in the backyard is the better way to go. The business I work for is used to operating on an entirely cash basis, and that drew lots of offers for loans, big loans.



Hmmm… allow people great power, with no oversight whatever. And then express shock when they abuse it.


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