Greenspan attributes the failure to properly price the mortgage based securities as causing most of the trouble here. Basically, the risk models were wrong, so capital requirements were too low. Greenspan believes that whatever regulatory changes are made may ultimately seem minimal when compared to the changes in the marketplace landscape after having sufferred through the credit crisis.
While I agreed with much of Greenspan's observations, he lost me on this last point. History has a way of showing that greed, fraud and excess of various types persist despite calamity. Alexander Hamilton wrote in 1792 after the "first" stock market crash which was trigged when William Duer, the Assistant Secretary of the Treasury under Hamilton, used inside information to speculate on bank stocks:
Tis time, there must be a line of separation between honest Men & knaves, between respectable Stockholders and dealers in the funds, and mere unprincipled Gamblers.
After panic insued due to the actions of speculators, Hamilton intervened to make sure that the panic did not bring down sound banks. That was 1792.
We are still working toward Hamilton's line of separation in 2008. While I have the utmost respect for Greenspan, we seem not to learn our lesson. The risky models to which Greenspan referred have been met by government intervention saving the day and hoping to avoid a deeper financial calamity. If anything, history has a way of repeating itself.
— JSM
1 comment:
Hello Jennifer,
Imagine that, a bunch of greedy bastards are slowly admitting that perhaps greed may not be such a good thing, after all. Now that they're busted, and have nowhere to run or hide, they've found a little humility. How touching...
Understand clearly, that these leaders have, once again, been caught red-handed, with their pants down around their ankles, and their hands in the cookie-jar/till, colluding to exploit and deceive everyone and at a scale and scope that is absolutely mind-boggling. Furthermore, this model of civilization (money, politics, and religion) has repeatedly failed. Unlike past failures though, this one is global in scope and greatly compounded by massive international deception and rampant greed in the form of derivatives, other smoke and mirrors financial schemes (scams), and several layers of speculation. The same out-of-control "betting schemes" were also behind the skyrocketing oil prices of recent years.
The derivatives scams alone have grown to more than 10-times the entire global GDP (at last counting) and are now failing because the scam/pyramid scheme broke and exposed the deception for all to see. A significant portion of global wealth and power was created and propped-up using these and other now-proven smoke and mirrors and house of cards illusions and delusions. These deceptions have grown many times larger than the rest of the entire world economy. Consequently, there is no way that all of the world's governments combined, who themselves borrow so-called "money" from other central-bank smoke and mirror deceptions, can solve this debacle, by using more smoke and mirrors money scams. The only solutions they are offering will take centuries to repay, if ever.
So, why should all of humanity be forced to suffer and struggle any longer now that the entire global financial system has been exposed as a mind-boggling deception within many other deceptions? No one in their right mind would continue to be enslaved by a proven deception, which is also proven to be undeniable slavery-by-proxy !!!
Here is Wisdom...
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