Pathetic Display at Yesterday's Financial Hearings

It's not clear who put on the most pathetic display yesterday at the committee hearing dubbed "The Role of Federal Regulators in the Financial Crisis" - former Federal Reserve Chairman Alan Greenspan or Rep. John Mica (R-Florida) who, along with others, sought to transform the meeting into a discussion of GSE oversight or the lack thereof.
Shown above next to Mr. Greenspan is Mr. Mica about to tape a sheet of paper in front of his microphone to remind attendees and viewers that the meeting on the GSE's role in the financial crisis is not scheduled until November 20th - after the election.

Some highlights, during which former Treasury Secretary John Snow makes his most profound comment during the entire hearing:

Mica: Do you know what comes before November 20th?

Snow: The 19th.

Mica: Of course as you might recall, it's a little thing called the election and we wouldn't want the trail to lead to people who have done the wrong things. What we don't want is for this committee to hold people who started this whole mess accountable. What we've been doing is tip-toeing around the tulips, when somebody's driven a bulldozer through our financial garden.

I have some questions for you...

The Florida Congressman then went on to ask a number of rhetorical questions about lobbying money spent by Fannie Mae (FNM) and Freddie Mac (FRE), Countrywide's (CFC) preferential treatment meted out for Democratic Senators, and campaign contributions directed toward Democrats, addressing former Fed Chairman Alan Greenspan as Mr. Bernanke in the process.

Just pathetic.

By comparison, the former Fed Chairman came off looking quite good.

This has got to be one of the saddest displays of partisan politics in Washington, a system that oftentimes places a much higher priority on assigning blame to the folks on the other side of the aisle rather than attempting to understand the problems they are charged with solving.

Let's be clear. There is plenty of blame to go around here - Alan Greenspan, Fannie and Freddie, Countrywide, hedge funds (also scheduled for after the election), rating agencies, the SEC, individual homeowners, Wall Street firms ... the list is very long.

There will be more on this later as there were a number of memorable interchanges and some revealing responses from the former Fed Chairman.

Comments

[User 284986:]

Well, lets call him the Marcy Kaptur for the Republicans.

Marcy was the one that confused Ben Bernanke with Hank Paulson.

Now we have Mica confusing Greenspan with Bernanke.

And the political circus goes on and on...

2008 Oct 24 04:51 AM

[pansyed:]

The Florida congressman should not have played his game but he is correct in that it is hard to understand how one can make regulations but at the same time hold the hand out for donations. There is plenty of blame to go around but the elected official opened the door for many to slip through. Those that are suppose to look after our interests should be forward looking and vigilant. They have failed us miserably.

2008 Oct 24 09:24 AM

[venividivici:]

Greenspan, a failure of monumental proportions. At least we can understand what he is saying now. And he is probably earning a lot more now that when he headed the Fed. It is pretty sick the way the world works. Maybe that is why we are heading for such an almighty fall.

2008 Oct 24 09:53 AM

[notsosmart:]

nobody could have stopped this.anyone really trying would have been booed out of town.there is no concern for lying ceo's,selfserving bod's,unethical behavior,lack of transparency,cheating & fraud until the bubble bursts.as long as the "tide lifts all boats" all are silent except to take credit for the good times.the dumb sheeples will continue to be fleeced.they keep electing the same the same self serving folks.

2008 Oct 24 09:55 AM

[markrhead:]

I think that it is outrageous that Congress has delayed looking in to how FRE & FNM ripped investors off, including their foundations' contributions and grants that were given. We sold their junk throughout the whole world and now we see the consequences. How can a GSE have a foundation that basiclly gives taxpayer money away to entities that would never receive them thru Congress or apopular vote.

2008 Oct 24 10:35 AM

[axelrod608:]

If there is an economic theory that says an economy will thrive on an unlimited volume of cheap, easy credit, It must be Greenspinism. Nobody with an IQ higher than room temperature and a passing grade in Econ 101 would believe anything that stupid. Our Congress did.

2008 Oct 24 12:19 PM

[crosseyed:]

I quote here from an article in the "Objectivist Magazine" in the JULY 1966 publication written by the infamous Greenspan.....this is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the"hidden" confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists antagonism towards the gold standard...

2008 Oct 24 12:59 PM

[carey_jim:]

America has always been about partisan politics.

We began this American parade with The Great Compromise and the Civil War was the inevitable consequence (the most partisan politics we've every experienced.)

We can only hope that America doesn't fall on that truly partisan sword again.

2008 Oct 24 01:20 PM

[SOLOMON SAM...:]

So now the great prophets and leaders of the American economy found on cnbc and other news outlets call the recent founder of American wealth Alan Greenspan the Pariah as he comments in congress today. Greenspan was “amazed” at the reality of his wildest nightmare scenario. I wonder how long it takes before people realize this whole global slowdown is from energy. I believe just two heating payments in the course of this winter of 2008 will fully align all the heads of society to the culprit, and thus, appropriate actions to solve such as the price of energy is the only variable for a global world to reduce in order for continued growth-unless of course a major war and acquisition of assets occurs such as Iranian oil fields. as i have written in times past, because of my bold advertising campaign to promote my experiments to end this crisis- i have been attacked and ridiculed by intrinsic instinctive animal behavior of others to great truths- thus- i will left to the end of this crisis- and accordingly the crisis will last as long as the uncovering of my deeds.
I love the man called jesus-a life of struggle and sacrifice for the betterment of mankind- this is the highest principle of life to live-struggle in any form- you want a strong body- train hard all the time- take one week off and you deteriorate- want a strong mind-read and learn everything as often as you can-want an enlightened soul- love god with all your heart and soul and struggle and sacrifice for the betterment of mankind-Life is a struggle- I wouldn't have it any other way- Free will


* my name is Solomon Sami Azar-born on the 13th January-1965. I have combined the century old ideas of Tesla and Einstein to produce safe nuclear fusion of heavy water in order to end the energy crisis- When the scientific community has found this and understands -the energy crisis will be over along with talks of greenhouse gases-I have been guided to this discovery by the heavens- by a force in this universe we are all connected to in spirit and pray to in the name of god- I have put together many signs and connections to form the big picture- I am a messenger of GOD---I have been sent by heaven to declare An Age of Unity has begun- world war 2 was Armageddon signified by two atomic bombs-An age of unity has begun
Time will tell

2008 Oct 24 04:29 PM

[von Murgenthal:]

The same idiots that benefitted from this trainwreck are now pretending
to work on solutions, but nobody has the courage to honestly describe the cause or take responsibility !

2008 Oct 24 10:56 PM

[madasiwannabe:]

Why isn't anyone asking him about his current employment? He sent the trains down the tracks and then left office to profit from the wreck. When it looked like it wouldn't happen, he got on TV and made sure it did. The companies he now consults for made Billions when the feds finally stepped in and took over the GSE's. Congress knew about it in January when they questioned the conflict of interest but for some reason has done nothing.

Congress doesn't want the truth to come out because of the number of people with their hand in the cookie jar. In 1999 then CEO of GS, Paulson convinced congress to pass a deregulation bill that caused the CDS market to explode. Paulson in 2005 convinced Cox to dismantle the CDS regulators Donaldson put in place. When the MBS/CDS market started to unwind and investment banks like GS started to implode, Paulson threw the GSE's under the bus. GS made a ton when LEH imploded, but stood to lose 20 Billion if AIG suffered the same fate. GS helped negotiate the loan for AIG to save their own skin.

Frank blocked legislation to contain the GSE's while his boyfriend worked as an exec at FNM. Go do a search on descrimination lawsuits against the GSE's in 2003/2004 and the congressional hearings. Then look at adjustments to GSE capital requirements, market share growth and sub prime exposure levels YOY... How could they grow exponentially at the same time the accounting scandals hit? Ask Chris Dodd... At the same time Countrywide started making sweetheart deals to members of several committees. At the same time, Countrywide became the biggest sub prime broker and Fannie Mae's biggest customer.

Look at the GSE's books very close and compare those statistics to the rest of the market. Their losses were actually very conservative compaired to the market, default rates were very 1/10th of WM and WB, their forclosed property holdings are 1/20th of the national total, but their holdings are half of the market. The week before they took over the spreads were actually down from previous weeks and stock prices were moving up. If they were in terrible shape and ready to collapse, why hasn't Paulson used one nickle of the 200 Billion congress authorized yet?

A lot of people have a lot to answer for and we the American people deserve to hear the truth, not after the election.... NOW!!!!

2008 Oct 25 09:34 AM

[whtamess:]

Obviously you have not done your homework and you know NOT of what you speak. Fannie Mae met every stress test had 40 billion in capital and should not have been taken over... I can't speak for Freddie Mac. If you understand a mortage as an instrument on the financial market it performs as long as people make their payment. Due to Mark to Market accounting rules (go to FASB web site and review Fas number 157) banks and the GSE's were required to record losses when people continued to make payments. This was one huge part of the problem... when you consistantly have to take a loss when the reality is the instrument is still performing is a bunch of hooey. The gov't doesn't have to conform to this FASB rule and can make money hand over fist and it was stated by a Senator that this was a way to pay the taxpayers back on the bailout. What is good for one should be good for all. We wouldn't be in this position if that rule didn't exist. There are some financial instuments that a rule like that would be correct for however a mortgage is not one of them.

2008 Oct 28 10:34 AM

[whtamess:]

my comment was intended for "markhead"

2008 Oct 28 10:37 AM

[Jason Rines...:]

Indeed, NotSoSmart and Vivi. And to Solomon, "There is nothing new under the sun" - King Solomon, Proverbs Old Testament

2008 Oct 28 05:11 PM