A withering article about Greenspan in the FT, the last sentence, in particular:

[Joe Chi Minh]

http://www.ft.com/cms/s/0/32b85c72-859b-11dd-a1ac-0000779fd18c.html

[lurky]

1. FT site is down.

Can you give us the gist?

[stillcool]

2. works fine for me..

http://www.ft.com/cms/s/0/32b85c72-859b-11dd-a1ac-0000779fd18c.html

[lurky]

3. They must have been having a server fart.

[Joe Chi Minh]

4. Have you got it now? This seems to be the nub of it:

"Where Mr Greenspan bears responsibility is his role in ensuring that the era of cheap interest rates created a speculative bubble. He cannot claim he was not warned of the risks. Take two incidents from the 1990s. The first came before he made his 1996 speech referring to “irrational exuberance”. In a Federal Open Market Committee meeting, he conceded there was an equity bubble but declined to do anything about it. He admitted that proposals for tightening the margin requirement, which people need to hold against equity positions, would be effective: “I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.” It seems odd that since then, in defending the Fed’s inaction, he has claimed in three speeches that tightening margins would not have worked.

The second incident stems from spring 1998 when the head of the Commodity Futures Trading Commission expressed concern about the massive increase in over-the-counter derivatives. These have been at the heart of the counter-party risk in the crisis. Mr Greenspan suggested new regulation risked disrupting the capital markets.

At the turn of the millennium, with no move to tighten margin requirements, a feedback loop sent share prices into orbit. As prices rose, more brokers were willing to lend to buy more shares. As share prices went up the buying continued, until the bubble burst. To create one bubble may be seen as a misfortune; to create two looks like carelessness. Yet that is exactly what the Greenspan Fed did."

And this is the concluding sentence:

"Mr Greenspan realises that something big has happened and describes it as a “once in a hundred years” event. But then, you do not get Alan Greenspans coming along every day."