When we all know the true culprit is bubble boy Alan Greenspan.
June 12, 2006
I believe the stupid people of the world will soon blame this man (wrongly) for the bursting of the housing bubble and the worldwide economic collapse
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22 comments:
that's why greenspan is out there spinning and shouting that this will end badly - he knows he's to blame in the end and wants to protect his legacy (while picking up $100,000 speaking fee checks)
build a fake economy and then get rich from public service. kinda evil, no?
And Bernanke thought he was getting a promption...
BWHAHAHAHAHAHAHA!
Bernanke is doing the right thing, we either keep raising interest rates, or the dollar goes to zero and the chinese and Japanese raise our rates for us, there is no free lunch, and the bill is now due.
That's why I did not like the Bernanke music video. They love Greenspan, but dislike Bernanke? What's up with that? They were econ students if I remember correctly.
Hopefully history analyzes the series of events carefully.
Good luck Ben!
You should just plain outside blame Greenspan. He deserves it.
Clinton is the real bubble boy.
Bernanke is cleaning up the mess and trying to restore or US dollar - much more important than the housing market. He should be honored for taking on such a challenge.
And spammer is doing his best to make sure of that. He is now talking in english. He blabbered that the housing bubble had popped. If he was still Fed chairman, he would have phrased it so that you had no idea what he was saying for sure. Then the next speech, same thing about interest rates. Some one should kick this old coot right in the balls and film it.
Its Greenscam's fault!
skytrekker, I believe the expression is "smoke and mirrors" not "smoking mirrors"
Skytrekker, don't be so quick to let Bubba off the hook. Do you remember a fellow named Robert Rubin? He was treasury secretary and the man who saved Clinton's ass before the '96 elections. He and Greenspan cooked up the scheme where we bought all the crap China, Japan, and Korea could produce in exchange for them lending us the money to but it. The bond guys were bought off with the "carry trade" Rubin and Greenspan created which allowed them access to money at negative real interst rates - a banker's wet dream!
Now Rubin runs Citi Group which stands to profit handsomely as Bernanke pays the piper for the stupid decisions made ten years ago and approved by then President Clinton.
The Bernanke Bind:
Scenario 1 - Keep rates low and let inflation go - Bush figures he can keep china buying our toilet paper for two more years then his successor will inherit a disaster.
Scenario 2 - Raise rates, destroy this bubble, make the middle class and uncle sam (a lot of t-bills need refinancing) functionally insolvent.
the answer of course is that it is completely out of his hands, the bubble already is bursting and uncle sam's only chance is to inflate its way of its debts
Stagflation Nation
Volker had to clean up the mess. . .
I am perhaps the only one here (at age 55) old enough to remember the 1970's hyper-inflation, and Paul Volker who raised rates to kill inflation - and brought us the 1980's recession with 10% plus unemployment. . .Bernake has the same tough job to do, but because of the Greenspan bubble, he only has to raise rates a bit more to "slow" the economy. . .it is a real balancing act - protect the dollar, keep the USA economy from crashing. . .we may muddle through with just a slowdown, and a housing crash in hot markets - as I have said before, there is NOT a housing bubble in many parts of the country. . .mostly just CA, AZ, NV, FL, and Metro NY/NJ. . .and of course DC, and Mass. . . hmmmmmm. . .maybe 30% of the country, but 80% of the housing sales. . .hmmmm. . .maybe we WILL have a meltdown. . .
Rubinnomics DID work: strong dollar, low rates, "surpluses as far as the eye can see."
Bush+Greeninomics don't.
Rubin was out during the bad part of the dot com bubble (as opposed to the high-quality secular tech expansion which was excellent if it had stayed on a powerful but reasonable course), and the Republicans were going nonlienar about a blowjob.
Remember that?
Greenspan could have raised the margin rates for stocks to deflate the dot com bubble but he didn't.
Greenspan and Bush's Treasury could have cracked down on lending standards to preclude toxic loans, but that wouldn't be popular. Both Treasury secretaries were reduced to pathetic cheerleeders for Bush + Darth Cheney's talibanomics: "tax cuts for the rich tax cuts for the rich tax cuts for the rich fuck the deficit".
Rubin had more balls and he could spank the bond and currency markets when they needed it. But basically he was smart. (he was a partner at Goldman and then a bigshot and Citibank I believe)
Ben is smart, but handicapped being a Republican. Greenspan used to be smart but his obsequiousness to power corrupted him.
Rubinomics my ASS! The deal Rubin and Greenspan cut with the Chinese and BoJ is the root of the problem we face today. Of course everything was great at the beginning, it was win-win all round. But you'll note that the current account deficits started upward at that point and "balls" Rubin told the bond traders not to worry. He then allowed the carry trade to make his buddies wealthy beyond their wildest dreams. Rubin convieniently exited just before the excrement hit the fan.
Alan Greenspan was scared shitless of a Y2K run on the banks, so in '98-'99 he pumped $2 trillion into the banking system and, voilà!, we got the dotcom "boom" and "new economy". This worked so well the Fed decided to do it again after 9/11.
After he left DC, the honorable Robert Rubin used the carry trade to clean up Citi's balance sheet and make himself a billionaire. So yeah, tell me more about this genius and all around admirable fellow.
Please don't exaggerate, the '70s weren't even close to hyperinflation. Volker was an old-school economist and what he did was probably the last great stand taken in that arena. The problems today dwarf the task he faced, and his methods aren't even an option today.
"That debt has to be serviced."
Of course it does, and that's why they are going to find ways to loan us even MORE money! Bernanke said in a speech (half joking) that the Fed could drop bags of money from helicopters if necessary.
If you gave Joe Sixpack the choice of 1) suffer under 20% higher taxes for a decade and pay off all your personal debt, or 2) borrow more money and just keep making those payments, which do you think he'll choose?
The federal government is just like Joe, and they will do the same thing. People in other coutries might be using our currency in their outhouses, but Joe and Uncle Sam will just keep on keepin' on.
I love the crack whore analogy. It's so true too. At some point, the dealer it starts dawning on the drug dealer that his whore ain't going to be repaying the money owed him, and he starts cutting off the easy money. Of course, a payday loan at 30% interest is hard to pass up.
Inflation reached 21% annualized under Jimmy Carter. That's pretty close to hyperinflation -- at least for this country.
Maybe this is what will trigger the riots after subprime FBs lose their houses. "It don't be my faults, they tricked me"
http://tinyurl.com/k9wqa
They couldn't afford the house / HELOC / Escalade anyway.
BB is getting heat from the markets - in the press.
http://tinyurl.com/fxmvt
What the heck is wrong with BB's hands? Did he have one of those schoolteachers with a ruler, like in the Blues Brothers movie?
http://biz.yahoo.com/ap/060615/bernanke.html?.v=7
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