Greenspan and the Vaunted Bay Area Both Going Down

[dontfollowtheherd]

I lost all respect for “good old Al” for letting this predicament perpetuate for a couple years longer than he should have. Now he’s on television (60 Minutes et.al.) and in print saying nothing could be done about it. B.S. This guy is a type A nerd who reads every report out there and now he claims they didn’t know it was this severe? Yeah right Al.

To top it off he’s out there pushing his new book / bio, trying to promote it and deflect criticisms of himself and potential lost sales due to his suddenly piss-poor reputation. No one could understand his Fed speak mumbo-jumbo double entendres which he admits he purposely contrived to confuse analysts and the public. Now he speaks as clearly and plainly as a ten year old. What a sham! I came across this article about him and one addressing the chinks in the armor of the “once untouchable” Bay area and felt they were more closely related than the Jeff’s clan. He’s done a hell of a lot more NorCal damage than Modesto. Check out the chart – even Napa and Sonoma have 5 times the number of NOD’s than a year ago with other cities up 3x times over. It’s just starting to hit in a lot of bay area communities so things will get very interesting over the next couple of years imo.

http://news.yahoo.com/s/nm/20070921/bs_nm/greenspan_bubble_dc_1;_ylt=Aiuyi_Ct3LfH_bOvZXFPDygE1vAI

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/19/BUH1S8PSN.DTL&type=business

.

[mixxalot]

That is because Greenspan is a criminal banker

The entire FED is one scam run by the elite globalist bankers. Most people are fooled to this and hopefully more wake up to the failure of the fractional banker and fiat monetary system as the dollar collapses in value and oil goes to 200 a barrel pain will be obvious.

[dontfollowtheherd]

I read an article from Richard Russell a week ago and he was saying how long these guys last is based on the amount of political pressure they bend to despite the Federal Banks supposed independence. Paul Volcker was the only one in years who would stand up to either party.

How about this one from EWI on 9/17:

Suddenly, Greenspan is Crystal Clear

The media followed Alan Greenspan’s utterances and prose with great interest for two decades, but only very recently did his words become simple or clear. The media dissected his serpentine locutions and his “mumbling with great incoherence,” like the cryptic prophecies of some mythological seer. But, now that it’s book-selling time, suddenly you can understand what he is saying. The question is, does he fully understand what he’s talking about?

[bsrsharma]

Suddenly it seems fashionable to blame Greenspan for all ills of the nation. It seems like yet another instance of the modern American pandemic of Blame Someone Else For My Troubles. Greenspan was NOT a President, Leader of Congress etc. He was just a Central Banker. His job description, to put it simply, is to ensure that people continue to believe that little green pieces of paper are valuable. In that he succeeded very well between 1986-2006 or so. No body asked his permission before waging wars, declaring tax cuts etc., He is not a financial adviser for anybody.

1. He is not responsible for Congress and President passing budgets with deficits

2. He is not responsible for causing trade deficits.

3. He is not responsible for people borrowing beyond their ability to pay.

4. He is not responsible for people speculating in assets and losing.

etc., etc.,

His main achievement is, even though there were major financial shocks, even though people engaged in bad behaviour like 1..4, he convinced most people to believe that the little pieces of green paper are worth hanging on to. Nobody used the phrase “American Peso” to describe U.S. $.

[AKguy]

“Nobody used the phrase “American Peso” to describe U.S. $.”

Not yet, but soon…

However, I agree with most of what you say. The arrogance and willful financial irresponsibility of the Administration and Congress over the past seven years has been breathtaking, and it’s going to take years to recover.

[NotCranky]

“Suddenly it seems fashionable to blame Greenspan for all ills of the nation.”

It would help if looking at him didn’t make me think of the wicked child extortioner, Fagan, of “Oliver Twist”. The man has an appearance that does not engender trust.

Disclaimer, I am not anti- semetic. Yes,the nose does probably have something to do with it.

[dontfollowtheherd]

You make some valid points in #’s 1 & 2. As to #’3 & 4 he made it an awful lot easier for the speculators and irresponsible borrowers to get the credit they never would have had access to in the first place imo. And to say “they” (notice not HE) didn’t know how bad it was is total b.s. They/he knew damn well from the reams of data streaming in and news reports of unverified income / savings going on during this time. They have access to all the reports in order to make their monetary decisions and there was probably a lot of water cooler talk going on in the Fed building as well. Some of these guys quite possibly made money flipping a house or two here and there and that word gets around quick. You’d have had to been on Mars not to pick up on what was going on.

[bobby]

so greenspan is to blamed for all of this?
what about the buyer who bought without thinking if they can pay for the house?
what about the loan broker who steered the buyers toward exorbitant loans?
what about the banks who loaned to people with bankruptcy just 6 months prior.
what about the investors who bought the repackaged loans.
etc…
yes, the rate was ridiculously low but if the rate was higher, the economy would probably have suffered a whole lot during teh post-dotcom years.
greenspan was trying to keep the economy from imploding from the Dotcom fiasco. He will get the blame if he didn’t lower the interest rate enough. He will get the blame if he does.

[Ex-SD]

*Greenspan is a really smart guy and he absolutely knew what was likely to happen withe the out of control, lending policies.

*Deadbeats will always accept anything that they can buy on credit because they have a mindset of “if you’re stupid enough to let me buy it on credit, you deserve what you’re going to get”. There are millions of people in this country who apply for credit cards and credit to buy cars and other items every day……and are turned down because the lenders know that they’re too large of a risk. So, Countrywide and other big companies made the bright decision to give these same people loans to buy expensive homes? Reckless, stupid, moronic, dumb and every other word you can use to describe what these idiots did because it’s very possibly going to put the entire country into a depression.

*Many of the brokers (well, the smart ones) knew what would eventually happen.

*The people who run the operations at Fannie & Freddie knew exactly what the outcome would be.

*The big boys on Wall Street absolutely knew what would happen.

The bottom line: There’s plenty of blame to go around because they’re all culpable. There is NO way to stop this huge tsunami. They can get out all the bandages that they want but it’s too big and too far along. When condo builders resort to auctions to move their properties in bubble markets like Miami, Fort Meyers and Sacramento and those properties are already selling for 50% off, it’s going to spread and get a lot worse in SoCal and the rest of California. DataQuick can keep on posting their optomistic comments and the real estate lobby can cheerlead all they want………prices will continue to fall and anyone who buys a home in any of these markets until 2010 (at the earliest) should have their head examined.

[bsrsharma]

he made it an awful lot easier for the speculators and irresponsible borrowers

He was not a Banker; He was a Central Banker. He can't provide adult supervision to stupid lenders/bankers. His mission is to keep the FFR as low as possible and money supply sufficient without causing undue inflation and promote near full employment. On those grounds he was excellent. Considering the challenges in his tenure, he performed brilliantly.

Folks, the US economy has been taking water continuously from 1970s onwards. He engineered the ship without sinking it for 20 years! To understand his genius, mark my words – this ship is definitely going to sink in the next 20 years. May be, once underwater and drowning, people will understand what a heroic job he did.

[XBoxBoy]

bsrsharma, you’re ignoring what he didn’t do…

you wrote about Greenspan:
His mission is to keep the FFR as low as possible and money supply sufficient without causing undue inflation and promote near full employment. On those grounds he was excellent. Considering the challenges in his tenure, he performed brilliantly.

Yes, he may have steered the ship well, but as the captain he also had a responsibility to alert the passengers to don their life jackets and to check and make sure there were enough life boats. But he didn’t do that. Not at all, and for this omission he will be remembered.

In the end I can’t help shake the feeling that he’s like all the other experts I’ve met in my life. Sure that they know the answers, confident that they will do the right thing, but all too often human, and as such capable of grave errors and misjudgements.

XBoxBoy

[NotCranky]

numb:

So how was your day?

…and who did you have for dinner?

[dontfollowtheherd]

He lowered the fund rates for the banks to lend at ridiculously low rates and kept them there for a long time because everything else had come to a standstill as far as growth of the economy is concerned. Once the spigot was opened greed in all forms took over. Let’s face it, the country was headed for a recession and for 5 years the inflated real estate market was the only thing keeping it afloat. Once sanity was restored and we got back to normal income to home mortgage valuation rates the fit has hit the shan. The real heroic job will go to Bernanke if he can extricate the U.S. from the mess that Al and his buds got us into.

[stockstradr]

We are renters in the Bay Area. We are ready to buy when prices return to sane levels.

“Bay Area foreclosure activity skyrockets”

That’s the kind of news we love! Let the fun begin. The Bay Area has been insulated long enough from the real estate crisis. A few hundred thousand homes that go into foreclosure is just what the doctor ordered.

Oh, one more thing. Greenspan is primarily to BLAME. He created the global credit glut that funded this disaster.

[SHILOH]

If Greenspan did such a great job of keeping the ship from sinking…why now, just as he leaves, the whole thing taking on so much water? I think he had a tremendous amount of power to influence the conditions that created the current mess.

[bsrsharma]

why now

Same ship anology. If you see a large ship sinking, you won't notice anything for a long time. Once a critical point is reached, things happen much faster. It is a non-linear phenomenon. Paul Krugman calls it Wile E. Coyote moment. The Coyote looked down on Aug. 17, 2007 and is falling now.

[uncomfortably numb]

Americans need to study their history in order to understand the relationships which exist between institutions and individuals. Everything that is happening is by design. You must remember that any ruling elite, no matter the system, simply views the masses as quanta of labor-power/consumer potential. Alan Greenspan was/is a mouthpiece for the elite and will deny reality to the end. Bill Clinton, in modern times, revealed that if you continually lie with a straight face, most people will tend to believe; as the more dependent they become, the less choices they have, the more they NEED to believe.

[drunkle]

“Bill Clinton, in modern times, revealed that if you continually lie with a straight face, most people will tend to believe; as the more dependent they become, the less choices they have, the more they NEED to believe.”

that would be good ol’ joe gobbles…

who said this:

Naturally the common people don’t want war…
it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along…
the people can always be brought to the bidding of the leaders…
All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger…

[Arraya]

“Of course the people don’t want war. But after all, it’s the leaders of the country who determine the policy, and it’s always a simple matter to drag the people along whether it’s a democracy, a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the pacifists for lack of patriotism, and exposing the country to greater danger.”

— Herman Goering at the Nuremberg trials

[NotCranky]

“Debt is the opiate of the masses.
Overly coveting things that are intended to be secured by debt prior to actually obtaining them is a double dose.”

All the leaders of a people have to do is create a frenzy for for high levels of home and other indebtedness and they can take off on any immoral war they want…. by threatenting the debtors ability to pay for the stuff the covet.

[uncomfortably numb]

It is Americans who want war; the leaders are simply an expression of that desire. We are a society founded on the principles of conquest from the very start. We worship power in all its forms, as we are as all empires before us, blood-sucking murderers. We love killing, violence, and all forms of destruction. We’re humans, like it or not.

[AKguy]

numb:

So how was your day?

[uncomfortably numb]

Actually, I had a wonderful day. I hope you did also. I do realize that most people really dislike reality interfering with their state of denial. Sorry to impinge.

[Author]

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