Too bad a bunch of volunteer bloggers understood the issue better than the economist who was in charge of our banking regulations, money supply and economy.
Americans, Alan Greenspan's incompetence has led or will lead to the downfall of the American homebuilding industry, the loss of $10 Trillion+ of wealth, millions of lost REIC and associated jobs, ruined families, millions of foreclosures, and the implosion of the world financial system.
Whoopsie - my bad. Mulligan?
Greenspan Acknowledges He Failed to See Early on the Risks of 'Subprime' Mortgages
WASHINGTON (AP) -- Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to see early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy.
In an upcoming interview, Greenspan said he was aware of "subprime" lending practices where homebuyers got very low initial rates only to see them later jacked up, causing severe payment shock. But he said he didn't initially realize the harm they could do.
Critics say the Fed kept rates too low for too long, encouraging a Wild West mentality in housing.
Greenspan, however, defended the institution's actions.
"They are mistaken," he said of the critics. "It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low," he said.