Greenspan Wanted Housing-Bubble Dissent Kept Secret

[kpete]

Source: Huffington Post

Greenspan Wanted Housing-Bubble Dissent Kept Secret
05- 3-10 03:09 PM

As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn't lose control of the debate to people less well-informed than themselves.

"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand," Greenspan said, according to the transcripts of a March 2004 meeting.

At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that "a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on 'flipping' the properties--selling them quickly at higher prices."

Had Guynn's warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided. But his comment was kept secret until Friday, when the central bank released the transcripts of Federal Open Market Committee meetings for 2004 and CalculatedRisk spotted it. The transcripts for 2005 to the present are still secret.

Read more: http://www.huffingtonpost.com/2010/05/03/greenspan-wanted-housing_n_560965.html

[sakabatou]

1. Complicity: thy name is Greenspan

[MisterP]

3. complicity? Alan was at the forefront of the movement to privatize and deregulate to let capitalism

flourish and bring wondrous prosperity to all

this has been going on since the 70s, when we started seeing distinct libertarians, the Powell Memo, and the anti-Great Society backlash (even if Dick Nixon did give us the EPA); remember that Greenspan was in Rand's depraved cult of the dollar sign

[msongs]

2. any arrogance here? nt

[UpInArms]

4. Greenscum was the bailout king - remember Long Term Capital Management?

http://en.wikipedia.org/wiki/Long-Term_Capital_Management

Long-Term Capital Management (LTCM) was a U.S. hedge fund which used trading strategies such as fixed income arbitrage, statistical arbitrage, and pairs trading, combined with high leverage. It failed spectacularly in the late 1990s, leading to a massive bailout by other major banks and investment houses,<1> which was supervised by the Federal Reserve.

LTCM was founded in 1994 by John Meriwether, the former vice-chairman and head of bond trading at Salomon Brothers. Board of directors members included Myron Scholes and Robert C. Merton, who shared the 1997 Nobel Memorial Prize in Economic Sciences.<2> Initially enormously successful with annualized returns of over 40% (after fees) in its first years, in 1998 it lost $4.6 billion in less than four months following the Russian financial crisis and became a prominent example of the risk potential in the hedge fund industry. The fund folded in early 2000.

**************

this was the preview - after shithead escaped with his gonads on this one, he played the world for an even bigger sucker

[unkachuck]

5. "...to lose control of a process that only we fully understand..."

....does democracy rub you the wrong way, Mr Greenspan?....are the dirty unwashed masses incapable of understand the fucking that you, the banks and wall street have given them?....could unpleasant side-effects result?

....and here your old-lady's a journalist, who earns a living shining light on corruption on behalf of the public....I would have thought that she would have explained to you that sunshine is always the best disinfectant....

....you could have just put a little sunscreen on that moldy old ass of yours and did the right thing....but now, you're gonna get burned....

[Democrats_win]

6. Quick, someone check Greenspan's birth certificate!

We need to send him to Gibber where they speak Gibberish.

[Demeter]

7. There Couldn't Be ANYBODY Less Informed Than The Feds and Greenspan

so what's the alternate excuse?

[chill_wind]

8. All the more reason for more sunshine and disinfectant. Audit The Fed!

Grayson and Paul were talking about exactly that tonite (Greenspan transcripts)in their final push on Ratigan for Bernie Sanders' Senate version amendment that parallels theirs.


http://www.youtube.com/watch?v=4cmJxW3q2go

[Wilms]

9. .

[FreakinDJ]

10. How many members of the Fed Board were seated then

Bush refused to fill vacancies in the Fed Reserve Board during his entire 8 years in office.

[Frank Booth]

11. What an idiot ....

[bemildred]

14. Indeed: "only we understand". nt

[PSPS]

12. Many people fully understood "the process."

It's easy to explain, really.

Real wages (adjusted for inflation) have gone down in the last 30 years thanks to what saint ronnie started. To keep people buying stuff, debt was substituted for income through easy credit. (Most people got multiple offers in the mail for credit cards every week, remember?) After people maxed out that form of credit, another was created -- the house. Mortgage money was available to everyone! No real income or proof thereof required (liar's loans.) Hence, property values bubbled due to all this undeserved credit flooding the market with monopoly money. As prices kept "rising," people used their houses as ATM's with HELOC's to keep buying.

Now that's over, sort of. Now Fannie Mae is doing practically the same thing -- no-down with interest-only option loans. The only difference is that now you must document your income. Gee, what a concept! If only we did that before. Oh, wait...

Anything to prop up the still-artificially-high housing prices to kick the can down the road.

[Festivito]

13. Maybe he didn't want his mother to find out her son is merely a rube.

Was she still alive then?

[defendandprotect]

15. Right . . . because Greenspan/FED work for private interests . . . not nation, not public!!

and we need to take back control of our money supply and POLITICAL decisions

from people with private interests and put them back in the hands of our

Congress. Some of them don't want to make political decisions re the economy

which might hurt them at election time. Puts more tension in play with their

pre-bribed and pre-owned status.

But we elect these people to make these decisions -- and they should be doing it!!