Jimmy Lathrop

Bernanke's Fall from Grace

I've been reading these comments above and again, this is all old news.
Who was Alan Greenspan? Was he the House majority leader? Did he write any legislation? Was he the President? Did he underwrite derivatives?

No, he was a wizened old man who talked in riddles, and the financial community loved it. He was like the Sensi on the old television show, Kung Fu, and part of his appeal came from his oblique statements which said everything and said nothing.

But the one thing he did do was inspire confidence, and markets need confidence. We have a shortage of confidence in the market because of a risk aversion theory that mortgage backed securities, illiquid in nature, could somehow be not only totally liquid but also AAA quality credit. That had nothing to do with him. If he had exercised caution he would have been crucified in the Wall Street Journal and they would have a more pliable cheerleader in his place.

Greenspan is the diplomatic husband who massaged the truth when his wife (the American public) asked him if she looked fat in the dress. Now everyone is pointing their finger at Greenspan because the American public was a fat credit engorged pig. All America had to do was look in the mirror.

Lots of people saw it coming but people hear what they want to hear. The same people crying about Greenspan's folly are the same people wiring money to scam artists in Nigeria.

You can't use your ignorance as a sword and shield against others when you make wrong bets. Judge Judy would say, grow up, put a period after it and move on. Just go back into your glass house with your stones, drink some warm milk and lie down.