He "recommended ARMS including NINA's?, Baron?
You sure about that?
Can you fill in the details of that story for me, please?
Here's Greenspan recommending ARM's:
http://www.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm
WASHINGTON — Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.
In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt", he said.
"Overall, the household sector seems to be in good shape," Greenspan said.
...
He said a Fed study suggested many homeowners could have saved tens of thousands of dollars in the last decade if they had ARMs. Those savings would not have been realized, however, had interest rates shot up.
Yes, and with rates at 1% in '02, the only obvious thing than can happen is for rates to go
UP.
And here's Greenspan talking about how the equity borrowing is working out so well:
http://www.federalreserve.gov/boarddocs/speeches/2004/20040223/
Refinancing has allowed homeowners both to take advantage of lower rates to reduce their monthly payments and, in many cases, to extract some of the built-up equity in their homes. These two effects seem to have roughly offset each other, suggesting that homeowners might set a target for their mortgage payments as a proportion of income and adjust their borrowing accordingly.
Indeed, the surge in mortgage refinancings likely improved rather than worsened the financial condition of the average homeowner. Some of the equity extracted through mortgage refinancing was used to pay down more expensive, non-tax-deductible consumer debt or used to make purchases that would otherwise have been financed by more expensive and less tax-favored credit. Indeed, the refinancing phenomenon has very likely been a supportive factor for the general economy. The precise effect is difficult to identify because it is hard to know how much of the spending financed by home equity extraction might have taken place anyway. Nonetheless, we know that increases in home values and the borrowing against home equity likely helped cushion the effects of a declining stock market during 2001 and 2002.
Helped cushion the effects, and also helped lead to a new bubble. Greenspan ADVOCATED this, and was only able to do so successfully by enticing borrowers with artificially low interest rates.
If anyone thinks this man, and the other brilliant minds he surrounds himself with, didn't know what would happen as a result of all this credit, they are fools. The writing was on the wall, and standard Austrian economics proves even BEFOREHAND that it wouldn't, and never will, work. The Austrians were warning about it for YEARS, but Greenspan is somehow CLUELESS?
Give me a fucking break. This man is a criminal, and he just came out and flat out fucking LIED TO THE WORLD. I might even have had a milliliter of respect for him, had he came out and apologized for being wrong and held himself at least partially accountable. But he didn't. He lied his ass off, and people are buying it. Mostly the liberals, because he gave them a talking point to run with: "dereg was the problem, blah blah blah".
Editec, you can't possibly be stupid enough to fall for it, can you?
