“Fed shrugged” – excellent allusion

The New York Times – via the Big Picture – had a super critique (including this splendid graphic – click for larger version) of Greenspan’s Federal Reserve, his incurious attitude towards subprime and adjustable-rate (and stated income, and piggyback, and…) mortgage lending, and his orchestra.

NYT pic

Nice, eh?

Today, as the mortgage crisis of 2007 worsens and threatens to tip the economy into a recession, many are asking: where was Washington?

An examination of regulatory decisions shows that the Federal Reserve and other agencies waited until it was too late before trying to tame the industry’s excesses. Both the Fed and the Bush administration placed a higher priority on promoting “financial innovation” and what President Bush has called the “ownership society.”

On top of that, many Fed officials counted on the housing boom to prop up the economy after the stock market collapsed in 2000.

The article is mostly a list of qualified observers who warned the Fed that shit was piling up and the fans were being turned on. It also criticises Greenspan for his (as we saw in a previous post, ongoing) defense of his policy, based upon the salvation of appreciating house values.

People are piling on, back over on the Big Picture. The comments are worth the few minutes’ read.

Advertisements

No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: