Greenspan "shocked" at credit system breakdown

Discussion in 'Economics' started by Gringinho, Oct 23, 2008.

  1. #51     Oct 23, 2008
  2. S2007S

    S2007S

    Greenspan is a liar is right, by lowering the rates to historical lows in 2001 and creating excess liquidity was just the wrong way to fix the slowing economy then. If we had gone through a deeper recession 5 or 6 years ago I don't think we would be where we are today, all that monopoly money is now gone and that easy credit has disappeared for good. By preventing the deep recession after the dot com bubble all they did was initiate a new bubble in commodities and real estate. Of course when all this was taking place everyone actually thought it was going to last forever, now we have over a MILLION homes empty and foreclosures at record highs as ARMS continue to reset, how anyone did not see this coming is actually an idiot.
     
    #52     Oct 24, 2008
  3. Does Fed have responsibility to prevent bank from making risky loans? No one is blaming Fed on this.
     
    #53     Oct 25, 2008
  4. Oh please! This ripping on the FDIC is ridiculous. How much money are you claiming was involved with these risky banks that were paying out high interest rates? There is a limit to FDIC insurance: $250000. What percentage of the market are these risky banks you are referring to? That isn't the reason for this mess. It was the risky lending practices and the ability to pass off the risk to the derivatives market.
     
    #54     Oct 25, 2008
  5. gnome

    gnome

    Isn't the Fed ultimately charged with oversight?

    It SHOULD have set the parameters to avoid high risk loans.
     
    #55     Oct 25, 2008