Fedman

Looking for a Cause for Thursday's Sell-off? Blame Greenspan

It was all a question of pay me now or pay me later. If Greenspan had not drop the rate so low for so long, and if regulators had clamped down on shady lending practices, the party would have come to a halt in 2004 and everyone would hate the Government/Fed for spoiling the fun. Now, letting the banks and lenders "manage their risks" and the "experts" invest in CDOs and AAA rated securities we see that the free market isn't perfect. The party just ended later, with a bigger hangover, but at least no one's blaming the regulators for doing to good a job. Now when rates are jacked up, or aggressive lending practices are quashed, there will be very little complaining.

Greenspan took a gamble that by keeping the good times going a little longer, another catalyst might come along and bail us out, other than consumer spending. It didn't happen.