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Alan Greenspan, Financial Times, August 4 2008
The /banking/ insolvency crisis will come to an end only as home prices in the US begin to stabilise
Home prices will stabilise only when the absorption of the huge excess of single-family vacant homes is much further advanced
Alan Greenspan, Financial Times, August 4 2008
This crisis was not brought to closure by the world’s central banks’ injection of huge doses of short-term liquidity. Only when sovereign credits were substituted for private bank credit, first in the case of the UK (Northern Rock) and subsequently in the case of the US (Bear Stearns), was a semblance of stability restored to markets.
Capital gains cannot finance new physical investment, but do add to global net worth.
The economic edifice – market capitalism – that has fostered this expansion is now being pilloried for the pause and partial retrenchment. The cause of our economic despair, however, is human nature’s propensity to sway from fear to euphoria and back, a condition that no economic paradigm has proved capable of suppressing without severe hardship. Regulation, the alleged effective solution to today’s crisis, has never been able to eliminate history’s crises.
It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management
Since early this decade, central banks have had to cede control of long-term interest rates to global market forces.
These are historic moments for the world economy.
First and most important, what is happening in credit markets today is
a huge blow to the credibility of the Anglo-Saxon model of transactions-orientated financial capitalism.
A mixture of crony capitalism and gross incompetence has been on display in the core financial markets of New York and London.
Martin Wolf, FT 12/12 2007
"The critical issue on the whole subprime, and by extension, the international financial system
rests very narrowly on getting rid of probably 200,000-300,000 excess units in inventory," /-houses/
Alan Greenspan, CNN 2007-11-06
Central Bank's monetary policy was not the primary cause of
the persistant decline in inflation and long-term interest rates
Alan Greenspan, The Age of Turbulence, p. 14
Greenspan's errors in judgment seemed so obvious they beg the questions:
Why did he make them?
Did he actually set out to redistribute wealth from the middle class to the rich while the country itself essentially burned the furniture for heat?
After all, his bubbles made the sponsors of those bubbles fabulously wealthy, ultimately to the detriment of the average person and the United States as a whole.
Or was he simply not up to the task?
Bill Fleckenstein, CNBC January 17, 2008