“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.
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.