tag:blogger.com,1999:blog-30762149.post3244445353010581930..comments2008-10-23T10:29:10.395-07:00Edhttp://www.blogger.com/profile/17892943744171590828noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-30762149.post-89613360258414409032008-10-23T10:29:00.000-07:002008-10-23T10:29:00.000-07:00GRENSPAN ADMITS HE WAS WRONG IN FAILURE TO REGULATE DERIVATIVES AND SUBhttp://www.bloomberg.com/apps/news?pid=20601087&amp;sid=ah5qh9Up4rIg&amp;refer=homeRIME MARKET<BR/><BR/>Greenspan Concedes to `Flaw&#39; in His Market Ideology (Update1)<BR/><BR/>By Scott Lanman and Steve Matthews<BR/><BR/>Oct. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami&#39;&#39; has engulfed financial markets and conceded that his free-market ideology shunning regulation was flawed.<BR/><BR/>``Yes, I found a flaw,&#39;&#39; Greenspan said in response to a grilling from the House Committee on Oversight and Government Reform. ``That is precisely the reason I was shocked because I&#39;d been going for 40 years or more with very considerable evidence that it was working exceptionally well.&#39;&#39;<BR/><BR/>Greenspan said he was ``partially&#39;&#39; wrong in opposing regulation of derivatives and acknowledged that financial institutions didn&#39;t protect shareholders and investments as well as he expected. Forecasting is an inexact science, he said.<BR/><BR/>``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,&#39;&#39; Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.&#39;&#39;<BR/><BR/>In May 2005 speech, Greenspan said that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.&#39;&#39;<BR/><BR/>Committee Chairman Henry Waxman, a California Democrat, said Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.&#39;&#39;<BR/><BR/>``You were advised to do so by many others,&#39;&#39; he told Greenspan. ``And now our whole economy is paying the price.&#39;&#39;<BR/><BR/>Waxman and other lawmakers repeatedly interrupted Greenspan as he answered their questions, in contrast to deference to his testimony while he was Fed chairman. <BR/>Entire Article here;<BR/>http://www.bloomberg.com/apps/news?pid=20601087&amp;sid=ah5qh9Up4rIg&amp;refer=homeEdhttp://www.blogger.com/profile/17892943744171590828noreply@blogger.comtag:blogger.com,1999:blog-30762149.post-9581111872718022602008-10-01T15:25:00.000-07:002008-10-01T15:25:00.000-07:00Greenspan probably bears the most culpability for the current credit crisis.HE FAILED TO DISTINGUISH BETWEEN NO REGULATION AND SMART REGULATION. THE LATTER DOESN'T INHIBIT FREE MARKETS YET PREVENTS BUBBLES WHEN THEY BECOME OBVIOUS INSTEAD OF WAITING FOR THEM TO BURST WITH THE ATTENDANT CONSEQUENCES LIKE THE GREAT DEPRESSION. THE INVISIBLE HAND CAN BE MANIPULATED AND DISGUISED BUT WHEN IT COMES INTO PLAY IT CAN BE LIKE A HURRICANE OR A TSUNAMI WITH THE IMPERSONAL AND DEVASTATING DESTRUCTION TO THE ECONOMY.ASMITHnoreply@blogger.com