Alan Greenspan: Current Financial Situation a “Once-in-a-Century” Crisis

Politics, Society, The Economic Beat

To paraphrase those sage wits at Hee Haw:

Gloom, despair and agony on me,

Deep dark depression, excessive misery.

If it weren’t for bad luck, I’d have no luck at all

Gloom, despair and agony on me

Seems the former head of the Federal Reserve; you remember him, that nice chap who kept interest rates low, so that the the housing market could get overheated, and balloon up into that nice housing bubble that burst? Well it seems that he’s declaring the economy has been knocked askew, into a “once-in-a-century” economic crisis.  

Seems the problem, according to Mr. Greenspan, isn’t that the interest rate was held down too long, it was simply repackaging all the subprime mortgages as investments, something we talked about here not too long ago.  He says that in addition to the squeeze taking out the likes of Bear Stearns, Fannie Mae, and Freddie Mac, we can expect to see more large financial firms collapse under the economic stresses.

If you’ve been following the Economics articles here on All That’s Evil, you’ve seen what we thing about this matter, here, here, here, here and here.

He further opines that recent decreases in the price of oil and food may help to avert a recession, but he said “I wouldn’t put my  money on it.”

Too bad he already put ALL our money on it, while he was head of the Fed, eh?

If the expectations of further business failures aren’t enough, Greenspan said that regulators “shouldn’t try to protect every single institution“.  But, apparently companies should be kept from failing “in a sharply disruptive manner“, which to my ear sounds like, adversely affecting Mr. Greenspan’s retirement savings.

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