Former Federal Reserve head honcho Alan Greenspan said today that he was “shocked” at the breakdown of the financial order.
Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity — myself especially — are in a state of shocked disbelief.
Shocked, SHOCKED! I tell ya! … which inevitably gave me this flashback from Casablanca:
Greenspan was putting in a performance for the House of Representatives Committee on Oversight and Government Reform. He was badgered into giving a lukewarm mea culpa, saying that maybe, sorta, he was, you know, “partially” wrong about blocking any and all attempts at regulation.
It is quite simple really. And it should be even clear to the politicians sitting in front of Greenspan by now. He flooded the world with too much liquidity as an attempt to save the US from the consequences of the tech bubble imploding. He created the carry trade, the “Greenspan put” and will undoubtedly do down in history as the worst Fed chairman in history.
Well, to be charitable to Alan, as a Fed chairperson, I think he was a very good politician.
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