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Greenspan is an ass face

March 5, 2011

“(Too) much intervention turns out to hobble markets rather than enhancing them,” said Greenspan, 84, who was appointed Fed chairman by Republican President Ronald Reagan in 1987 and served until 2006. “Any withdrawal of action to allow the economy to heal could restore some, or much, of the dynamic of the pre-crisis decade, without its imbalances.”

Dynamic of the pre-crisis decade ?

Without its instabilities ?

Greenspan is arguable the biggest individual culprit for the credit crisis after his reckless oversight of the shadow banking system and mortgage market, his reckless interest rate policy and his trouncing of any attempt to rein in an out of control and unregulated 700trillion derivatives market.  His policies and oversight of the markets (lack thereof)  led directly to the financial crisis. Greenspan is in NO position to comment on a a free market.  He is a central planner first and foremost and a walking contradiction.

What I see as a”Free market” certainly hasnt existed in this country for over a century (or perhaps ever)

A market where interest rates are manipulated by a central govt is not free.

A market dominated by a few major players who are able to manipulate pricing and stifle competition is not free. (See Pimco, BlackRock and the FED)

A market in which the Govt hand picks winners and loser – is certainly not a free.

The biggest market manipulator has always been the Federal Government.  What concerns me today is how openly Governments manipulate markets.  They broadcast it on the news.  “We are going to buy bonds soon so if you were thinking about selling, wait, and perhaps you should consider buying today and sell them to us at a higher price in a week or two” (front running).  An entity with the ability to expand their balance sheet to infinity in order to buy assets in the open market should not exist as this entity will inevitable go too far.  This has happened.  The Fed has passed the point of no return and the only solution is to buy more assets and descend further down the rabbit hole.

 

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One Comment leave one →
  1. Ktown Posse Pal permalink
    March 6, 2011 8:12 pm

    I saw that documentary “Inside Job” (won the Oscar), and that’s pretty much what was said re Greenspan — that he was completely reckless and negligent.
    Thanks for the post.

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