Saturday, March 17, 2012

Greenspan stated in a House committee hearing: What went wrong with global economic policies is the breakdown in the securitization of home mortgages

A partial transcript at House Committee with Alan Greenspan. Oh, Greenspan has been so wrong about the subprime crisis. If only Congress would reread Greenspan's words because it is all about securitization stupid:

HENRY WAXMAN: "You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying its price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?"

"And what I'm saying to you is, yes, I found a flaw. I don't know how significant or permanent it is, but I've been very distressed by that fact.

REP. HENRY WAXMAN: "You found a flaw in the reality..."

ALAN GREENSPAN: "Flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

REP. HENRY WAXMAN: "In other words, you found that your view of the world, your ideology, was not right, it was not working?"

ALAN GREENSPAN: "That is -- precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well."

"What went wrong with global economic policies that had worked so effectively for nearly four decades? The breakdown has been most apparent in the securitization of home mortgages."

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