Alan Greenspan and Ben Bernanke: Portraits of Extreme Ignorance and Incompetence

By on February 17, 2009

While Alan Greenspan was asleep at the switch, a bubble of historic proportions was allowed to grow out of control and swamp the global economy in toxic debt and derivatives. Greenspan is now trying to shift blame and even has the gall to say he was not aware of the potential problems developing in the subprime mortgage market.

Jeremy Grantham states, “Greenspan encouraged, admired the ingenuity of the new instruments for subprime. I mean, went out of his way to encourage it. Some, as in Greenspan, beat back an attempt to do some regulating of subprime markets. And I think it looked pretty bad.”

Mr. Grantham about current fed chairman Ben Bernanke, “And Bernanke couldn’t even see the house bubble. On our data and Robert Shiller’s, it was a three-sigma, one-in-100-year event. After 100 years of being flat, it soared after 2000. You could not miss it. And right at the peak, October ’06, Bernanke said — quote— ‘The U.S. housing market merely reflects a strong economy’ — unquote,”

Mr. Grantham is incredulous at the incompetence of Bernanke, “What was he looking at? Where were his statisticians? These are the guys we picked out of millions to lead us in a crisis. And they can’t see a three-sigma bubble? Every single bubble of that kind has broken.”

Sources:

http://dealbook.blogs.nytimes.com/2009/02/12/greenspan-says-he-was-mystified-by-subprime-market/

http://moneynews.newsmax.com/streettalk/bernanke_disgraceful/2009/01/28/175906.html

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