‘I made a mistake,’ admits Greenspan

FT.com ^ | 10/23/08 | Alan Beattie and James Politi

[Born Conservative]

Alan Greenspan, the former Federal Reserve chairman, said on Thursday the credit crisis had exceeded anything he had imagined and admitted he was wrong to think that banks would protect themselves from financial market chaos.

“I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” he said.

In the second of two days of tense hearings on Capitol Hill, Henry Waxman, chairman of the House of Representatives, clashed with current and former regulators and with Republicans on his own committee over blame for the financial crisis.

Mr Waxman said Mr Greenspan’s Federal Reserve – along with the Securities and Exchange Commission and the US Treasury – had propagated “the prevailing attitude in Washington... that the market always knows best.”

Mr Waxman blamed the Fed for failing to curb aggressive lending practices, the SEC for allowing credit rating agencies to operate under lax standards and the Treasury for opposing “responsible oversight” of financial derivatives.

[Freedom_Is_Not_Free]

Hi, I'm Alan Greenscam and I'm not really a moron. It was all done on purpose. I made sure all the pigmen and power elite got theirs. So you got the shaft? You don't know how to play the game. Make sure you are rich and powerful and I'll help you make more on the backs of the little people. See, that's how it works. Then I'll tell Congress I made a teensy mistake, like Moody's selling out to rate all the toxic paper AAA and then making up that BS about it being a teensy error in the math for their computer model. Ain't corruption grand? And the best thing is, the little people get to pay for all our excess. Wheeeeeeeeee! Andrea and I thank you little people from the bottom of our hearts.

[Grampa Dave]

"all their little chickens are coming home to roost!!!"

Except those are not little chickens!

Hey ABB, please post your pictures of the hungry birds feasting on the remains of a hedge funder.

[BOBTHENAILER]

Oh man...that is a very nice post.

[dfwgator]

“I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders,”

This is the fatal flaw of attributing human characteristics and assumptions about organizational behavior to that of individual humans.

The people who run organizations, don't necessarily have the best long-term interests of the organization at heart, they are looking for maximizing their short-term outcome, and then getting out before the crap hits the fan. As long as they can cash out, they don't give a damn about the shareholders.

[FFranco]

Wasn’t the idea of states seceding from the Union tried before, and unsuccessfully?

[wita]

Don’t worry OBAMA IS GONNA SAVE US!!!!!

I wonder. First he needs that veto proof majority, for the insurance that indeed he will have the power to save. Little more than a week away. I Can’t wait. Just what was it about you and me that inspired O to save us? I think that comment was rhetorical.