Greenspan Sees "once In A Century" Crisis

There was a time when world markets would hang on the every word of Alan Greenspan.

Now "the Maestro" is testifying on Capitol Hill and the stock market seems neutral. After all, he's basically just telling us what we already know.

Here's Greenspan's full testimony, and some of the highlights:

* We're in a "once-in-a-century credit tsunami"

* Banks took risks with the subprime lending.

* "I cannot see how we can avoid a significant rise in layoffs and unemployment."

* "Stabilization of home prices is still months away."

To be sure, there has been a significant rethinking of Greenspan's role in the boom years of the 1990s, and historians and economists will continue to debate his loose monetary policy and its role in the credit bubble. Greenspan, dubbed "The Maestro" in a Bob Woodward book, used to be able to move markets by hundreds of points at a mere hint of a rate cut or a nuanced outlook on the economy.

In his testimony Greenspan did make one significant shift, admitting that more regulation is now needed in financial markets, an abrupt reversal from his years as Fed chairman advocating a lighter regulatory approach.

"There are additional regulatory changes that this breakdown of the central pillar of competitive markets requires in order to return to stability, particularly in the areas of fraud, settlement, and securitization," Greenspan said. 

When he started his testimony, the Dow was up about 77 points. And when he finished, the Dow was at 78 points.

Former Treasury Secretary John Snow is a little more blunt with the blame game on the economic crisis, seeming to put the blame on Congress.

"I called for a regulator who could get into the new lines of business they [the financial industry] were in, we called for disclosure," Snow said. "If we had done this, we may not have had the need for this hearing. ... I regret I was not more effective in convincing Congress."

UPDATE: Greenspan is gracefully dodging the blame under questioning from Henry A. Waxman, the chairman of the Oversight and Government Reform Committee.

"Something that looked to be a very solid edifice … did break down," Greenspan said. "That shocked me and I still do not fully understand why it happened."

Greenspan says he "made a mistake in presuming the self interest of banks ... and others, that they were capable of protecting their own shareholders and the equity in their firms."