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.