Just Listen to Greenspan Now.

Er... no.

I predicted this last Nov.

No, Greenspan did predict a lot of this, but no one really listened. Both Clinton and Bush tried to fix some of the problems in Fanny Mae and Freddie Mac, but nothing got done. You can pretty much blame everyone in both the government and the private sector. It's one of those things where more people are guilty than not guilty.

Inflation is going to be a bitch...

You can blame Greenspan for first being against then being for the Bush tax cuts.

He was protecting the employment of a guy called Alan Greenspan.

Now he needs to keep ante-ing up the $$$ he can get for a speech.

"New Crisis" usually works.

Greenspan's take on derivatives was that government should not regulate them. Don't ever think Alan Greenspan wasn't one of those most responsible for the economic melt down. Now he advises against any protectionism, I would almost say do exactly the opposite of what he says because his interest is that of teh mega wealthy not the working person.
Protectionism would be bad for mega wealthy people who use cheap labor in China to manufacture goods they sell here but not so bad for unemployed workers here.

did i miss the what, when, where, and why of the next crisis?

of course there will be some crisis sometime downstream - that is a prediction?

if i say "at some point in the future, now or 280 billion years from now, man will be extinct" - am i some sort of fucking Nostradamus?

He added that he had predicted the crash would come as a reaction to a long period of prosperity.

Uh, no. It was in reaction to bad loans written by bankers who were going to securitize them and sell them off to other investors. There was no incentive to not make bad loans as they would not be around long enough to collect on.

Throw in $4.50 per gallon gasoline eating up all discretionary income and you have the daily double.

Without real wage growth for the average worker there will be no recovery. A jobless recovery will only implode on itself.

The 1980's told us that we can survive as a "consumer economy"... please show how.

Inflation is going to be a bitch...

Not if prices cannot go up and people who don't work don't spend.

"Not if prices cannot go up and people who don't work don't spend."

On the contrary; we've had high inflation and high unemployment before. Think about it: businesses are contracting, so the goods being produced are dwindling, at the same time we're printing money as fast as we can. The textbook definition of inflation is too many dollars chasing too few goods.

Danforth has history on his side on this one.. horrific inflation can occur in the most drastic of economic downturns.. Germany after WW1 for example.. and to a lessor extent, the Carter years here in the US.. stagflation ..

If you want to keep your eye on the ball, watch the FOREX market. The dollar made some great gains since July, thanks tto the stimulus and the great train robbery the bankers pulled off, but it's loosing those gains fast. We are now a nation that is dependant on foriegn goods and food sources. What is going to happen and with very little warning is a universal currency, and it won't be Bernake or Obama that forces it down our collective throats, it will be those with the most goods. We all know that the dollar is only worth what people think it is worth. There is no gold behind it or anything else for that matter. Once the world no longer wants dollars. The huge advantage Americans hold over monetary wealth will disappear overnight along with the stock market. American goods will drop in value on the foriegn markets and foriegn goods will go up. Get ready for it. Stockpile beans and hotdogs.

Ringmaster you are absolutely right
WE have been sold down the river by the capitalists
on both sides of the pond.
There will be no Amero it will be the Euro!
Talk to the Europeans that watched their savings evaporate when their local currency was converted to Euros

Listen to Greenspan making excuses for not doing his job in the service of the common good. But his job is really to serve a small group of concentrated wealth. He just doesn't want to admit that in public.

"did i miss the what, when, where, and why of the next crisis?"

No, you're right he didn't give any specifics. I think what he was saying was that "if" ever there is another economic crisis then that somehow absolves him of any responsibility for the one we just experienced.

There is no if to the next crisis, we are in the midst of it, yet most have no clue that we are already there. The residential real-estate was just a drop in the bucket.

WTFUA!

The lesson here for those of you not bloated on koolaid is that when government intervenes in the market things go awry. Let me ask you a question? Why would a banker make a loan that he knows will not be paid? Traditionally a bank loses money on such a loan.

It is because the risk has been removed by the socialist morons in the government. With ridiculous programs like the CRA, and supported by quasi government agencies like Fannie and Freddie who repackaged the loans.

There are some accurate comments about inflation above but most of you need a very basic lessons in market fundamentals.

The bursting of the housing bubble is the result of 50 years or more of government intervention in the housing market. If government stays out of the picture; markets, jobs and people flourish. Goods find their true price. In other words capitalism works because it gives people incentive to work and enjoy the fruits of their own labor.

At least Greenspan won't be causing this one.

"The bursting of the housing bubble is the result of 50 years or more of government intervention in the housing market."

Real estate prices grew at a slow rate for many years until around 2001 when Greenspan lowered interest rates and when variable rate mortgages allowed people to buy expensive houses with small payments for the first year or two. Because of the rapid increase in values, due to the bubble nature of the market fueled by low interest rates and variable rate mortgages, most folks thought they could remortgage later at a fixed rate. Many got caught before they could because so many thought the bubble would continue.
All I'm saying is that the market was very stable until around 2001 and your comment about fifty years of government intervention is nonsense.
They used the bubble to make it appear that the Bush economy actually worked. They knew for certain it would crash and burn as anyone who looked at the number of mortgages set to reset interest rates would have to recognize that the incomes for the higher payments just weren't there. They just thought they could hold it together until Feb. 2009.

It's like he completely divorced himself from the significant contributions he made while at the Fed.

"Markets were stable until 2001". You are so full of shit danni it's staggering. You have spent PAGES telling us how bad capitalism IS, and how reagan, republicans, and corp America ruined things...yet here you say the exact opposite. What's the matter your selective memory kicking in?

Typical dr left 'not the same policies which got us into this mess'...yet ignoring democratic responsibility whatsoever!!!!!!!

What greenspan said was very correct. Markets move in cycles, and panics are a part of cycles. have been for hundreds of years, will be for hundreds more.

Tell us how would regulations have prevented the tulip mania of the 1600's? The south china seas crisis or the US railroad crisises????

Don't wprry, the US will bail your sorry ass out AGAIN!!!!

Do any of you have children? Do you give them an unlimited checking account and expect them not to buy toys?

Inflation is going to be a bitch...

Not if prices cannot go up and people who don't work don't spend.

#9 | POSTED BY 726

The spectre of deflation is just as real. With little or no consumer spending domestically, that slack cannot be absorbed to give cause to increased pricing. The only impetus to jolt up pricing would be increased manufacturing costs for fewer demanded goods. Unfortunately that is not realistic either since we don't manufacture domestically for most things. The raw material inputs account for anywhere between 60-85% of most manufactured goods with labor and overhead taking up the balance.

The bursting of the housing bubble is the result of 50 years or more of government intervention in the housing market. If government stays out of the picture; markets, jobs and people flourish. Goods find their true price. In other words capitalism works because it gives people incentive to work and enjoy the fruits of their own labor.

#17 | POSTED BY KRAM

You mean like in 1999 when the Gramm-Leach-Bliley Act destroyed the Glass Steagal Act of 1933?

The bursting was the result of a bubble FORMED from the destruction of Glass-Steagal.

The equilibrium price point is a bunch of bullshit.

You need more than Econ 101 to sound like you know what the fuck you are talking about.

Thanks for making my point for me Legio. Try actually reading what you paste genius! Gramm Leach Biley and Glass Steagall are both examples of government intervention.

let me quote myself " If government stays out of the picture; markets, jobs and people flourish.

The key word being OUT, as in OUT of the way, OUT of the picture etc...

Glass Steagal should have been repealed there is no reason why a financial institution shouldn't be allowed to offer multiple services in multiple markets. But don't you see it genius? When poor business decisions were made WE BAILED THEM OUT. We let our governemnt REWARD poor decisions. We eliminated (socialized) the risk. If there is no risk then why should I worry about lending my banks money to a schmuck who cannot verify his income and has no down payment.

Try thinking..instead. Oh..and please keep up the potty mouth stuff , it always adds to the lucidity of an argument.

Thanks again.....NEXT

Greenspan/Bernanke = wings of the same bird.

Why are they allowed so much power?
Why do we expect so little?

K-ram, you tired old Reaganism is boring.

Then why comment on it?

The Gramm-Leach-Bliley Act was deregulation of key parts of the Glass-Steagal Act. So, KRAM from one side of your mouth you are saying no regulation is necessary and from the other you are saying the bubble was a direct result of the degegulation. The question is, was the bubble a good thing or a bad thing? You may disagree, but I think it was a bad thing because it directly led to banks and other financial institutions to make stupid loans that had regulators been paying attention to individual numbers instead of doctored balance sheets on total assets and liabilities, many of the unregulated loans would have been subject to legal action for letting it happen in the first place.

What you are advocating is a system where there is no oversight so anyone or any bank can be the next Bernie Madoff.

If government stays out of the picture; markets, jobs and people flourish

Too much regulation?

That was the problem?

* head desk *

On Topic?

Greenspan now forsees that which escaped him during his long reign?

* best Churchlady voice *

How convenient!

New Book deal?

See: Above response.

Be Well.

The lesson here for those of you not bloated on koolaid is that when government intervenes in the market things go awry. Let me ask you a question? Why would a banker make a loan that he knows will not be paid? Traditionally a bank loses money on such a loan.

Actually they didnt care. They gave a loan to every Tom, Dick and Harry (or Tyron/Jose, Terron/Jesus, and Jamal/Manuel) who had a paycheck or a downpayment, then they lumped them all together, tagged them with a AAA rating and sold them to some other dipshit who only bought them to sell to an even bigger dipshit.

Then someone down the line opened the box and found the bricks and said what the fuck?

Loh

A regular Nostra-dumbass.

Greenspan Predicts Another Crisis

...and I thought I was unique.

Crisis

Thanks for making my point for me Legio. Try actually reading what you paste genius! Gramm Leach Biley and Glass Steagall are both examples of government intervention.

let me quote myself " If government stays out of the picture; markets, jobs and people flourish.

The key word being OUT, as in OUT of the way, OUT of the picture etc...

Glass Steagal should have been repealed there is no reason why a financial institution shouldn't be allowed to offer multiple services in multiple markets. But don't you see it genius? When poor business decisions were made WE BAILED THEM OUT. We let our governemnt REWARD poor decisions. We eliminated (socialized) the risk. If there is no risk then why should I worry about lending my banks money to a schmuck who cannot verify his income and has no down payment.

Try thinking..instead. Oh..and please keep up the potty mouth stuff , it always adds to the lucidity of an argument.

Thanks again.....NEXT

#27 | Posted by Kram

What a fucking moron..

I did read and it was correct. You post a chicken or the egg argument.

The Great depression and Glass-Steagal were the result of your disastrous "the market will take care of itself" mentality. The housing bubble was the result of the overturn of Glass-Steagal. Pure capitalism cannot exist like the 19th century where the robber barons basically raped and pillaged America and concentrated wealth in the hands of the few.

Your simplistic libertarian reasoning is irrational and illogical. Capitalism has to have guard rails or will take up off the cliff every time.

K-ram, you tired old Reaganism is boring.

#29 | Posted by grumpy_too

The Libertarian supplysider's belong in the waste bin of history. Their collective 19th century mentality has failed. When you take government out of the equation and let the "market" run free, it ALWAYS rapes the citizenry it is suppose to help.

Human nature. When there are no guards at the bank, there are people who are perfectly happy to walk off with all the money. That's why regulation is necessary--well defined, fair, consistent. Otherwise, you have the same results in various sectors of the economy that you would have if you revoked all traffic laws and speed limits. Some people are all about "Me, Me, Me" and laugh at the idea of commons responsibility.

The consequences hit all of us right between the eyes--do they not? I mean, except for a few people who day-trade for a living or have a seat on the NYSE, how are those 401(k) plans and pensions doing? Not well, I'm quite certain. Who has that money now? Not you.

Regulation. It's kind of like playing Monopoly with the rule book.

It's like he completely divorced himself from the significant contributions he made while at the Fed.

#20 | Posted by Ray at 2009-09-09 05:41 PM |

He was just doing as he was told. None of these people are their own person. It really would be interesting to know who is really pulling the strings on these puppets.