Friday, Mar 19, 2010
The dog ate my homework
FT: Greenspan hits back at claims he caused housing bubble
He attributes the financial crisis to overseas regulators, the US credit rating agencies, financial houses, mainstream economics and (cont p94).
Posted by icarus @ 08:25 PM (932 views) Add Comment
14 Comments
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1. sneaker said...
Translation: drug dealer denies overdoses are anything to do with him.
2. hpwatcher said...
It's just great to see the finger being pointed.
3. Ulfar said...
Has he said "it all started in the UK yet ?"
Time they got back at us seen as GB blames it all on them, which is nonsense obviously.
4. paul said...
I think Mervyn King should also be in the spotlight for the same reason.
5. Crunchy said...
3. paul said...I think Mervyn King should also be in the spotlight for the same reason.
They all p in the same bucket. It's called teamwork.
6. Doormouse said...
Greenspan's ego is more inflated than the asset bubbles he unwittingly helped to create
7. icarus said...
Two separate things - IRs and de-regulation. Even if the former had a smaller role than many think it is on the latter that Greenspan and the Fed stand unequivocally condemned. Just one example: many warned back in 2000 that predatory lending to subprime borrowers was a growing problem. The Fed was at the forefront in asserting Federal authority over the states all, or nearly all, of which tried to take action to contain this problem within their jurisdictions.
"It was the fault of the Chinese, who saved too much because they have no social safety net" = "It's time for US banks to sell them healthcare insurance and other financial services".
8. taffee said...
I think the property dealings of boe committee...then we may get a handle on why they kept interest rates so low for so long
9. bystander said...
@icarus - do the yanks export anything that doesn't damage either the environment or the social/ political/ ethical fabric of our lives? Discuss.
10. sneaker said...
http://www.independent.co.uk/news/business/news/exgovernor-george-says-bank-deliberately-fuelled-consumer-boom-441160.html
Ex-Governor George says Bank deliberately fuelled consumer boom
By Jane Padgham
Wednesday, 21 March 2007
The Bank of England deliberately stoked the consumer boom that has led to record house prices and personal debt in order to avert a recession, the former Bank Governor Eddie George admitted yesterday.
Lord George said he and his colleagues on the Monetary Policy Committee "did not have much of a choice" as they battled to prevent the UK being dragged into a worldwide economic slump by slashing interest rates. And he said his legacy to the current MPC was to "sort out" the problems he had caused.
Lord George, who headed the Bank for a decade from 1993, revealed to MPs on the Treasury Select Committee that he knew the approach was not sustainable. "In the environment of global economic weakness at the beginning of this decade... external demand was declining and related to that, business investment was declining," he said. "We only had two alternative ways of sustaining demand and keeping the economy moving forward - one was public spending and the other was consumption.
"We knew that we were having to stimulate consumer spending. We knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term. But for the time being, if we had not done that, the UK economy would have gone into recession just as the United States did."
He said he was "very conscious" that stimulating consumer demand could give rise to problems in the future. "My legacy to the MPC, if you like, has been 'sort that out'," he said. Under Lord George's governorship, rates were slashed from 6 per cent in 2001 to 3.5 per cent in 2003, pushing house price inflation above 25 per cent and high street spending growth to its highest since the late-Eighties boom.
In a wide-ranging discussion on the first 10 years of the MPC, Lord George also rejected suggestions that the MPC should target specific concerns such as soaring house prices, arguing that it was vital to take the broader picture of the economy.
Meanwhile, Kate Barker, a current MPC member, said in a speech last night that interest rate changes might become more frequent as the committee tackles volatile energy prices, rising inflation expectations and increasing pricing power. "This is a different kind of uncertainty from worries about demand which have been more usual during my time on the MPC, and I suggest that this may prompt a change in observed behaviour towards more frequent interest rate changes," she told the CBI North East dinner.
11. taffee said...
bystander
no...www.usdebtclock.org
12. icarus said...
@ bystander - one answer is to google 'confessions of an economic hit man' if you haven't already done so.
13. bystander said...
@taffee@8 - and yet we are led to believe that this debt is sustainable. The 'unbiased' reporting of the facts is breathtaking in it's double speak.
@icarus@9 - I have seen it and it represents a very sad state of affairs. Honesty, ethics, one wonders if they ever really existed or were created to keep the majority in servitude while the minority, run around and do whatever they like to whatever and whomever they like, with one result in mind - increasing their balance. Greed is good - was and is probably the real mantra of humanity, very few are actually happy with their lot, although a vast majority really should be, especially the lucky sods who work for financial institutions and appear to be getting way above inflation pay rises, while everyone else appears to be having their wages frozen or cut.
14. d'oh said...
It wasn't me. I didn't do it, and I won't do it again...