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Greenspan warns of more bank bail-outs

ft.com — However, Mr Greenspan cautions that a heavy-handed regulatory response to the crisis would do more harm than good because it would depress global share prices. He worries that governments, already troubled by inflation, might try to reassert their grip on economic affairs.

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  • rrouse, on 08/05/2008, -4/+40The rich are always for helping themselves with public money but never for helping the people with rich people's money.
    • Metasquares, on 08/06/2008, -12/+9Rich or poor, why is it acceptable for them to take anyone's money?
      • DagonNL, on 08/06/2008, -5/+12You can always move to some third world country where they do not take your money.
        Oh I forgot, no jobs or roads or hospitals there either.
    • mike17032, on 08/06/2008, -8/+6*****.

      Take a look at the income tax breakdown to see just how much of the cost of Government is carried by the rich. Bill Gates pays more in tax each year than your ***** ancestors have ever made total.
      • Lewie, on 08/06/2008, -4/+2That's because he made hundreds of times MORE than all of them put together. Of course the rich are suppose to pay more. Taxes sure don't seem to hurt their ability to buy whatever the ***** they want. But when a person only makes $20-30k, they notice every cent taken out of their pay.

        And tell me, can Bill Gates or Warren Buffet do the work of thousands of people? Then why do they get paid like it? Certainly their their employees have something to do with their success. I understand the risks and rewards of starting a business, I don't think anyone is worth $100s of millions a year.
      • enri, on 08/06/2008, -0/+1Warren Buffet stated is was stupid that he has lower tax rate than that of his secretary. Warren and Bill Gates spend a large sum of their own money on philanthropy. Not all rich people are evil.
      • Lewie, on 08/07/2008, -0/+2I know they're both "good guys" when it comes to the über rich, but I'm using them as examples. How about Bob Nardelli, who took a nice $210M severance package while destroying Home Depot's share price (I worked at Home Depot for a couple summers, so I have some emotions wrapped up in it). I'm positive I could do a better job than him, where's my windfall?
    • notque, on 08/06/2008, -0/+1And that's as good as reason as any to welcome them to St. Paul

      http://digg.com/politics/We_re_Getting_ready_RNC_W ...
  • DCMacHead, on 08/05/2008, -6/+40What a douche! Tell people to take out adjustible rate mortgages and proceed to raise rates 17 times. Add to that failure to regulate institutions that were passing out no documentation mortgages to tomato pickers for $1 mln homes in California, negative amortization mortgages (meaning you don't even cover the interest on the note), etc.

    This guy is the source of a lot of today's problems, along with the bank regulators that sat around with their thumbs up their asses for years on end doing nothing about shady lending practices.
    • b4cheung, on 08/06/2008, -6/+15He did warn you before raising rates 17 times.

      He tells you to stop borrowing so much. He tells you that you are being "irrationally exuberant".
      You borrow more.
      He raises interest rates to try to stop you from borrowing.
      You borrow more.
      He raises interest rates again.
      You borrow more.
      He raises interest rates again.
      You borrow more.
      He raises interest rates again.
      You borrow more.
      Eventually interests rates are so high, you can't borrow.
      Then you bitch and whine.
      • stagmire, on 08/06/2008, -1/+9"He tells you to stop borrowing so much. He tells you that you are being "irrationally exuberant."

        Yes, he called "irrational exuberance" when the DJIA was at 5k. Ten years later it was at 10k. Great advice, Alan.

        "He raises interest rates to try to stop you from borrowing."

        Sure, after he SLASHED the funds rate to less than 2% after 9/11.
    • richmomz, on 08/06/2008, -4/+4To think this guy used to be a staunch gold standard advocate, and still considers himself a Libertarian to this day. In his defense though, he was just a puppet to a higher power - the owners of the Federal Reserve.
    • jdaniel284, on 08/06/2008, -0/+1I am getting so sick of the idiots using the term "douche" to describe something. If you are going to be a mindless follower, follow trends that have at least have some hint of class instead of the common foul-slobbering filth.

      .. reminds me of the days not so long ago when every zit-faced pale loser had to refer to something "sucking ass".
    • pak314, on 08/07/2008, -1/+1If he is a douche then where is his popped collar?
  • kemp34, on 08/05/2008, -6/+56Greenspan was the primary architect of the unnatural mortgage/housing/credit/consumer bubble that is now crashing and laying waste to our economy. Alan Greenspan deserves NOTHING but total derision.
    • dougs55, on 08/06/2008, -2/+13Don't forget Phil Gramm and the 1999 bank deregulation acts.
    • synarchy, on 08/06/2008, -0/+7Well, if you want to blame deregulation, how about blaming regulation as well? Namely the The Community Reinvestment Act, which forces lenders to make loans to people who are bad risks or face severe penalties for "discrimination".
    • 3leggedHorse, on 08/06/2008, -0/+1Totally agree.
  • Berkana, on 08/05/2008, -3/+30Greenspan himself is responsible for the strategy of distributing bad investments among packages of good investments and given them AAA ratings in an attempt to sell off what would otherwise be impossible to sell. By rating poisoned investment packages "AAA" to fool people into buying them, our investment rating firms betrayed trust, which can never be gained again in the wake of this disaster.
  • sk11, on 08/05/2008, -3/+26"Mr Greenspan says this “insolvency crisis” will end only when home prices in the US begin to stabilise."

    A problem Greenspan should know all about, since that bastard is the architect behind the crisis! Damn you to hell Greenspan, TO ***** HELLLLLLL!!!!!!!

    * assembles his specially designed pitchfork with crowbar attachments *
    • diggduggDOOM, on 08/06/2008, -1/+3Don't forget the new torch attachment.
  • principle, on 08/06/2008, -2/+14“Mr. Greenspan says the performance of world stock markets will be crucial in determining how well the financial system holds up in the interim, and to banks’ ability to recapitalize themselves.”

    That is essential to understanding why the market has been behaving irrationally in the face of bad news and awful financial data. It is obvious that any decline in the stock market will negatively affect banks’ assets, pushing them over the edge into bankruptcy. So nowadays, the Fed is no longer content with manipulating gold and silver prices. Thy have teemed up with the Treasury and the major trading companies (and their dark pools) in an effort to forestall the decline in the broad market. This will end badly…
  • richmomz, on 08/06/2008, -6/+39In Capitalist America, the bank robs YOU!
    • mcla007, on 08/06/2008, -1/+12"State-Capitalist" to be precise...
    • Shiftgood, on 08/06/2008, -1/+3win.
    • rockefeller2, on 08/06/2008, -6/+2I can't believe people are still digging this ***** up.
      This meme is like 15 years old.
      • notque, on 08/06/2008, -2/+4I can't believe people are still complaining about this *****.
        This complaint is like 15 years old.
  • mcsenget, on 08/06/2008, -2/+7Did anyone catch that part in The Manifesto when Ron Paul says he spoke to Greenspan once at a session of Congress?

    How is it possible that a man like this once believed in the gold and sound money?
    • richmomz, on 08/06/2008, -0/+5Google "greenspan gold" and you will get all kinds of links to early essay's written by Greenspan touting the benefits of the gold standard, mostly dated in the late 60s (just a few years before Nixon took us off the gold standard in 1971) and often accompanying works by Ayn Rand.

      His position at the Federal Reserve certainly seems at odds with this mindset, and to this day he still considers himself a Libertarian. How ironic that a staunch gold standard advocate and libertarian was at the root of our current problems fiat currency problems and asset bubbles.
    • shotsy5, on 08/07/2008, -0/+2He couldn't resist the power and allure of the Dark Side ` alas.
  • Shiftgood, on 08/06/2008, -3/+17Didnt we also bail out the airlines?

    Wtf, i dont get republicans. Whenever they argue against me they talk of an open and fair market for all companies. Where the government should never intervene and the market through an invisible hand will always maintain itself.

    Care to explain? Im open to any points.
    • dougs55, on 08/06/2008, -1/+6See the book Bad Money by Kevin Phillips. Most of the arguments the television pundits and the republicans in your break room came up with were always pure simplistic *****. For example the idea that unregulated monopolies = free market. And many others.
    • angryfirelord, on 08/06/2008, -1/+7These "republicans" in Congress have long sold themselves out. They may preach small government and such, but what they implement is the opposite and as a libertarian leaning republican myself, these bailouts simply disgust me. Even Ronald Reagan engaged in quite a bit of spending (mostly defense) when he was in office. Greenspan deserves to be run into the ground for all of the financial bubbles he's created because of his failure to comply with the free market. (like cutting rates when they didn't need to be cut) At this point, the only republican I'm listening to is Ron Paul.
    • hivoltage815, on 08/06/2008, -1/+4Republicans = socialism for the rich
      Democrats = socialism for the poor

      Both parties don't have the nation's best interests in mind. Conservative values are fading away.
    • clemsontigers, on 08/06/2008, -4/+5You do realize that the Dems control Congress, right?
    • richmomz, on 08/07/2008, -0/+2Agreed - the schmucks on Wall Street sing the virtues of capitalism, privitization and free markets when times are good. But the instant the system turns against them they all start screaming for government intervention and regulatory control.
  • DagonNL, on 08/06/2008, -15/+1On your knees, all you US taxpayer biatches, spread them cheeks, take it hard and deep, while opening your mouths and swallow. You are all a bunch of eager tools.
    • web2pointYo, on 08/06/2008, -1/+2the harshness made me laugh. :)
      biiiieeeeeeeches!
  • missingship, on 08/06/2008, -3/+2I've got a cashbox at home. No worries.
    • vbullinger, on 08/06/2008, -0/+4Yes. Worry.

      Whenever they print money out of thin air, they devalue the money in that box. Therefore, you may still have $100 in that box, but it's really only worth $90.

      They just robbed you, and they didn't even have to break in to do it.

      And they've been doing this for 95 years. Ouch.
  • clemsontiger, on 08/06/2008, -7/+2Greenspan was most of the reason we got into this mess. I actually think Bernanke knows that he is doing.
  • rdelbel, on 08/06/2008, -7/+2How did greenspan cause this crisis?
    IT was the banks not the federal reserve.
    The fenderal reserve cant lend money to poor people...
    • synarchy, on 08/06/2008, -1/+4The federal reserve IS "the banks".

    • rdelbel, on 08/06/2008, -1/+0No it isnt
      The goal of the fed is not to profit
      The federal reserve creates money out of thin air.
      Why does it need to profit?
      No one at the federal resrve profits from anything.

      The goal of the fed is to create and stabalize the monetary system.
  • mrzack, on 08/06/2008, -3/+6True. ***** Greedspan.
  • URnotheonly1, on 08/06/2008, -5/+4***** Greenspan! That man has done more damage to the USA then anyone else... Hows that "Bridled Exuberance" working for your ass lately? You and your buddies really socking it to the USA like you want? Man should be hung
  • jonnyeuchre, on 08/06/2008, -2/+9What I don't understant is that he's saying that the system is terribly flawed, yet the government shouldn't do anything to fix it...

    Here is the problem:

    Under Greenspan, the banking and lending regulations were stripped away and the cost of money was negative (ie. the fed was lending money at a price less than the rate of inflation).

    Obviously the whole system is run by crooks and needs to be overhauled and regulated so the taxpayer doesn't have to bail the billionares out again.
  • drgooch, on 08/06/2008, -0/+5Greenspan's one of the big reasons we're in this mess, so what he says really doesn't matter all that much.
  • web2pointYo, on 08/06/2008, -0/+2Rev. Lovejoy running down the street:
    "IT'S ALL OVER PEOPLE"
  • Kenzan, on 08/06/2008, -0/+10Best Practice:
    Stop buying stuff that you cannot afford.
  • DangerCollie, on 08/06/2008, -2/+5Gee, thanks for the 411, Al. Where was that brilliant insight when your policies were enabling the irrational exuberance that set up the current lending crisis? Give a bunch of 12 year olds loaded guns then act surprised when someone gets shot.

    How about just STFU and drink your prune juice.
  • GunOfSod, on 08/06/2008, -1/+7Ohhh so social welfare is just for large companies in the US? Do I have it right now?
  • jgatz, on 08/06/2008, -0/+6i hate these things
    its like flood insurance
    dumb banks do whatever they want and get bailed out


    dumb people dont buy insurance and get bailed out

    however it's American tax dollars which subsidize the stupid

    the moral of the story is that if you have political clout do whatever you want because people will take of you. if your unfashionable be ready for a worl of hurt
  • krnldmp, on 08/06/2008, -0/+5USA failed when pensions started turning into 401k. It was back then that the market realized it couldn't get any further playing with their own money and had to start sucking in the little guy's. When you can bilk regular Americans into forfeiting their Life Savings (Daddy, what's a "life savings?") for some kind of stock market scheme, its over.
    • thisguy457, on 08/06/2008, -0/+1That is a little oversimplistic. The major difference between a defined benefit program (pension) and a defined contribution program (401k, 403b, 457b, etc.) is who takes on the risk. In a defined benefit program, the company takes on the risk, as they're maintaining the pension fund. In a defined contribution program, the employee takes on the risk because the employee is charged with maintaining the fund in whatever way he so chooses. It's naieve to think that the company pays for the former and the employee pays for the latter. Both are taken out of employee pay (places that have a pension typically pay less than places that don't.) While a pension has lots of great features associated with it, guaranteed money for the rest of your life and such (like a deferred annuity), greater gains can be realized in a defined contribution. Plus you don't have that pesky risk of the company accountant raiding the pension fund or packing it full of company stock.
      • krnldmp, on 08/06/2008, -0/+1The whole idea that an additional layer of abstraction implies greater stability is complete horse apples. There's never any guarantee whatsoever. The risk gets shifted upward (on paper) but so does the benefit. What it CAN be guaranteed to do is reduce the interest of the company you work for to maintain any sort of stability on its own. If the system was working the way it was supposed to, a company's wealth slated for pension payout would be something the company OWNs. In the new systems it really has nothing. You don't get a hamburger now, and you are promised to get your money on Tuesday, so long as the stock market doesn't lose money.
      • krnldmp, on 08/06/2008, -0/+1As a matter of fact, if you're really looking for stability you wouldn't even ***** around with the company you work for. You'd demand a salary suitably sized so that YOU can build a savings account. A nation is wealthy when everybody has CASH, not when it is financed to the teeth, all hoping sell out of the stock market someday. That's a Sucker play.
  • induren, on 08/06/2008, -0/+6Yea because not regulating at all and then winking and nodding to Wall Street et al that the govt would always bail them out worked SO WELL.
  • stutimandal, on 08/06/2008, -0/+4http://en.wikipedia.org/wiki/Image:Greenspan%2C_Al ...

    This is what Prez Bush gave to Greenspan.
  • barbiesnow, on 08/06/2008, -1/+2I don't believe AlanGreenspan had anything to do with the Savings and Loan Debacle that Bush's daddy helped bail out..And who was part of the Keating Five who worked their corruption through the banking system..none other than ...JOHN mcCain...so much for all the name calling , get an historical perspective and see that history keeps repeating itself over and over...
    • BigDrake, on 08/06/2008, -0/+1History is not repeating itself here... It never changed! Greenspan has been in office since Regan appointed his worthless ass and NONE of the following presidents had the balls or brains to find someone better, they just wanted "stability" and low inflation. Thanks to the Carter administrations record setting disaster, they all ran scared. And, Greenspan has everything to do with the Loan debacle(s) past and present.
  • rootnik, on 08/06/2008, -2/+2Does anybody else think that allot of these banks are artificially creating problems for themselves just to get ahold of our tax money?

    Yes, I understand what is going on with inflation and the mortgage crisis. I'm just buying that after years of build up that all of these banks are really going to collapse at the same exact time.
  • junkwheel, on 08/06/2008, -0/+11Crash the markets, bail the companies out, sell them to JP Morgan for nowhere near their value, oh look! JP Morgan now has even more banks under it's control!

    Totally circumstantial.
    • notque, on 08/06/2008, -0/+6JP Morgan was a war criminal, why should the company be any different?
  • chadell, on 08/06/2008, -3/+4"A modern classic of financial reporting on the corrupt alliance between predatory lenders and free-market zealots in government ... A well timed and lively guide to the wreckage created by financial deregulation and its destructive effect on both consumers and the broader economy."

    -- Robert Kuttner, co-editor of the American Prospect and author of "The Squandering of America"

    read on...http://mpelembe.blogware.com/blog/_archives/2008/4 ...
  • Rudegar, on 08/06/2008, -1/+7there is a saying that if you pee in your pants to get warm it will not last long and after that you'll be even colder

    Greenspan tried to keep peeing and as such postponing the coldness but it just made it more cold when the urine ran out
  • Temo1, on 08/06/2008, -1/+2Well respected, educated person agrees with Digg: Person is Lauded.

    Well respected, educated person disagrees with Digg: Person is dragged through the streets and told to "stfu".

  • DeFex, on 08/06/2008, -0/+3Somehow the title misspelled "wants" as "warns"
  • pilobilus, on 08/06/2008, -0/+3Is there a Nobel Prize in hypocrisy? Oh, right, the Presidential Medal of Freedom.

    With DemoPublican party unity assured by the parasitic relationship of "both sides" with a small cluster of corporate sponsors, the U.S. has become a Fascist State. When Nancy Pelosi declared that "Impeachment is off the table," she declared the end of Rule of Law in the United States. The very rich will continue looting the United States until our entire economy crashes and burns, and the full mechanism for a Fascist totalitarian State is already in place, under the banner of "counter-terrorism", to handle the uprisings that will follow.
  • Barackalypse, on 08/06/2008, -0/+2It was government exerting their grip that caused half this mess to begin with by perusing a monetary policy I term "stupidly low interest rates and massive unchecked deficit spending".
  • breemode, on 08/06/2008, -0/+1Well Im going to go down and get my 46 dollars and 23 cents out of WAMU
    before they take away my life savings!
  • Shlufi, on 08/06/2008, -0/+2That's one Jew that isn't good with money.

    I recommend replacing him with another Jew, probably Joseph Stiglitz, Bernanke, or Lawrence Klein, possibly even Paul Samuelson or Stanley Fischer. The last time America had a smart Jew in his position America had the largest surplus in her history.

    I don't mean to be a racist but this Job seems overwhelmingly dominated by Jews, and if you have one in there, you might as well have a smart one that knows what he's doing.
  • jdago, on 08/06/2008, -0/+2GREENSPAN should shut up. he caused a lot of the problem. now he has the nerve to warn us of more problems to come. thanks greeny
  • DickDarthVader, on 08/07/2008, -0/+0Go low folks, go low.
    Limit your gas, macdonalds, starbucks buys. Samething with movie rentals, dinner out, shopping malls, etc. The resultant drop in tax revenue will hurt the government:) Plant a victory garden. You will be suprised how many tomatoes will grow in a bucket! Then Nancy "stretch face" will see the actual problem in the countryside. Ops, did I say Nancy? Anyhow, buy less, pay less in tax. Government wilts. People become free. Everyone becomes free. Long live the Boston Tea Party?
  • RationalXubrnce, on 08/07/2008, -1/+1 Anyone surprised that a powerful Jewish finance mans actions don't match his words hasn't been paying attention.
  • yves6, on 08/07/2008, -0/+0Mr Greenspan is responsible for that mess
  •  

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