Economic Crisis: Greenspan kept Fed worries about housing bubble secret

[babylonsister]

What, is today unload day? So much going on, maybe no one will see this crap? First Paulson, now this, or vice versa? :crazy:


Ryan Grim

Greenspan Wanted Housing-Bubble Dissent Kept Secret

First Posted: 05- 3-10 11:30 AM | Updated: 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.

more...

http://www.huffingtonpost.com/2010/05/03/greenspan-wanted-housing_n_560965.html?ref=twitter

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Pelosi: Bush Admin Barred Officials From Briefing Congress On... Financial Crisis in Fall 2008

[indepat]

1. Will once again invoke my oft-repeated refrain: Greenspan, a name that will live in

infamy. :P

[babylonsister]

3. The fact that he considered himself so informed yet made such a

mess of it while being so condescending should earn him a spot somewhere, and it's not in his comfy dc residence. :grr:

[laughingliberal]

2. Let's really encourage the Senate to support the bill to audit the Fed.

It's time for some transparency in that cabal.