[classicman]

Back on topic -
Greenspan Admits Flaw in Regulation Stance

Greenspan said he was in "a state of shocked disbelief" that his theory about lending institutions was flawed. He believed financial firms would act responsibly on their own to protect their viability and shareholders' interest.

This holds with the greed comments earlier posted by someone here on the cellar - Hmm hey tw, do you remember who that was?

While lawmakers were quick to point out Greenspan's role in inflating the housing bubble, others say there is plenty of blame to go around.

Indeed, the failed mortgage-finance giants Fannie Mae and Freddie Mac were government-supported entities whose main objective was to promote homeownership to low-income and minority Americans. The GSEs were pushed by lawmakers to loosen standards and buy riskier mortgages whose debtors may not have documented their income or provided other evidence that they could afford the home.

Hmm this sounds rather familiar too.

"That's one of the gross misperceptions here," says Rich Yamarone, director of economic research at Argus Research. "You have these lawmakers waving their fingers at [Greenspan], but the they're the ones who adopted all the policies that turned into this. When do we get to turn the tables and wave our fingers at the lawmakers who allowed anybody who wanted to have a home to buy a home -- whether they had a job or income or anything else?"

I believe thats a hat trick for the, as of late, rather unpopular dwellar.

Rep. Ron Paul (R., Texas), a free-market conservative and former presidential contender, goes a step further to say that the existence of a federal bank that sets monetary policy -- rather than the market setting interest rates itself -- is flawed. Paul says the housing bubble was "preventable," but that the Fed and Congress created the financial crisis because they set "artificially low interest rates" while "insisting that subprime mortgages should be made."

"I don't think he offered any solutions and I don't think he admitted that he caused all the trouble," Paul says of Greenspan's testimony. "I think it's more of the same."

"Swish"

Robert Shapiro, chairman of Sonecon and former undersecretary of commerce under President Bill Clinton, says that as Fed chairman, Greenspan undoubtedly knew that the demand for securitized mortgages was "based on a bubble" and that risky assets were being purchased with excessive leverage.

Sets the timeline also previously mentioned.

Greenspan on Thursday took effort to lament the need for stricter regulation, as well as the loss of the subprime mortgage market, which opened the doors of homeownership to citizens otherwise barred from that American dream.

Sounds like the "good & noble intentions that were based upon a poor plan" posted earlier.