http://blogs.ft.com/maverecon/2008/...rrors/#more-179 "Mr Greenspanâs apologia pro vita sua in the Financial Times of Monday, April 7 2008 fails to convince. 1. The Greenspan Fed (August 1987 - January 2006) did indeed contribute, through excessively lax monetary policy, to the US housing boom that has now turned to bust. 2. The Greenspan-Bernanke put is real. It is an example of an inappropriate monetary policy response to a stock market decline. 3. The Greenspan Fed focused erroneously on core inflation, rather than using all available brain cells to predict underlying headline inflation in the medium term. 4. The Greenspan Fed failed to appreciate the downside of the rapid securitisation during the first half of this decade and acted exclusively as a cheerleader for its undoubted virtues. 5. The Greenspan Fed displayed a naive faith in the self-regulating and self-policing properties of financial markets and private financial institutions. 6. The Greenspan Fed, by enabling the rescue of Long Term Capital Management in 1998, acted as a moral hazard incubator. 7. The failure of the Greenspan Fed to press, before or after LTCM, for a special insolvency resolution regime with prompt corrective action features for all highly leveraged private financial institutions that were likely to be deemed too big and too systemically important to fail, demonstrates either bad judgement or regulatory capture. 8. During his years as Chairman of the Federal Reserve Board, Mr. Greenspanâs statements reflected a partial (in every sense of the world) understanding of how free competitive markets based on private ownership work. This partial understanding guided his actions as monetary policy maker and financial regulator. Mr Greenspanâs theories have been comprehensively refuted by the financial crises of 1997/98 and 2007/08." __________________ "If someone has a gun and is trying to kill you, it would be reasonable to shoot back with your own gun." - the Dalai Lama.