Sept. 16, 2007
Greenspan Defends Low Interest Rates
Former Federal Reserve Chairman Talks To Lesley Stahl About Subprime Mortgage Meltdown
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Former Federal Reserve Chairman Alan Greenspan talks to 60 Minutes correspondent Lesley Stahl. (CBS)
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Greenspan On Housing Crisis
Part 1: Alan Greenspan speaks with Leslie Stahl about his tenure at the Federal Reserve and admits that he did not foresee warning signs of a sub prime mortgage meltdown.
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Greenspan On Past & Future
Alan Greenspan sits down with Leslie Stahl and reflects on the six presidents he worked with, and discusses the future of the U.S. economy and the crippled housing market.
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Inside The Fed
A history of the Federal Reserve, glossary of terms and a look at changing interest rates.
Now he has written his memoir, "The Age of Turbulence," which comes out just as he's coming under fire -- something he's not used to -- for today's housing and lending crises. His critics say he established a pattern of bailing out Wall Street investors.
Greenspan sat down with correspondent Lesley Stahl for his first major interview, defending himself against the criticism that he should've done something to stop the shady practices in subprime lending. In a rare admission, he told 60 Minutes he missed its significance.
Asked why he didn't speak out, if he knew these practices were going on or even suspected that there was something illegal or shady, Greenspan admits, "While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late. I didn't really get it until very late in 2005 and 2006."
But others at the Fed did get it -- that banks and mortgage companies had already signed up millions of home buyers and speculators, many with poor credit, for so-called subprime mortgages with complicated interest rate adjustments that have led to record numbers of defaults. Some of the practices were fraudulent.
One of his former Fed governors, Ed Gramlich, said that he proposed that the Fed examine these lending practices and look into them to see if something could be done. Greenspan rejected that idea.
Why did he reject it?
"I thought that…we would not be capable of doing what he was suggesting," Greenspan says.
"But if sitting on them, taking some regula-what…" Stahl asks.
"Well, I think not," Greenspan replies.
"Even looking into it?" Stahl asks.
"It's nothing to look in to particularly because we knew there was a number of such practices going on, but it's very difficult for banking regulators to deal with that," Greenspan says.
He insists there's nothing he could've done to prevent today's plummeting home prices and the fact that a million families have lost their homes, and many more could. But some economists now say Greenspan actually created the housing bubble and the credit crunch by keeping interest rates too low for too long.
"Just remember we raised interest rates at every meeting from June of 2004 till I got out of office," he says.
"You raised rates in 2004. But only after you held interest rates at historically low level for three years, while the bubble, the housing bubble was forming," Stahl points out. "And that you had 13 rate cuts in that period of time."
"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," Greenspan explains.
But some of the Fed governors who worked with Greenspan at the time are now saying that they think interest rates were too low for too long.
"I think they were mistaken," Greenspan says.
What this shows is how certain he is about his views, and how firmly he guided the Fed when he was Chairman and dealt with shocks to the financial markets by quickly lowering interest rates. Now in the current turmoil investors are calling on his successor Ben Bernanke, "to do what Greenspan would've done."
"The sense is you would have acted sooner. You would have thrown more cash and liquidity in the system. That you would have acted faster and more dramatically," Stahl remarks.
"I’m not sure that's true and let me tell you why," Greenspan says. "We were dealing in an environment back there where inflation was easing. We could have acted without the fear of stoking inflationary pressures. You can't do that any more. And therefore it's a different world. I'm not certain I would have done anything different were I there."
Asked if he doesn't think he would have acted faster, Greenspan tells Stahl, "I doubt it."
"You don’t see any light between you and what Mr. Bernanke's doing?" Stahl asks.
"I think he's doing an excellent job," Greenspan replies.
"The CEOs of Ford and Chrysler are begging the Fed to lower rates. I mean, on their hands and knees," Stahl remarks.
"I would suggest they focus on selling, creating better cars for their customers," Greenspan says.
Produced By Karen Sughrue
© MMVII, CBS Interactive Inc. All Rights Reserved.
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See all 92 CommentsA fool and his money will soon be separated. Let the buyer beware. All words of wisdom. Just as the bubble in the stock market took care of the fools and crooks, so will the housing market. Let the prices fall, the foreclosures pile up, and financial instability hit the lenders and their customers. The proper balance will follow as the natural order resumes.
No bail outs. This is a great opportunity for the disciplined investors and people with money and prudent lifestyles.
Re: "Greenspan Defends Low Interest Rates"
Alan Greedscam is as responsible as anyone else for the current collapse of the housing market, and the coming economic contraction.
Ben Bernanke and the Fed are going to make the same mistake next week!!! If the Federal Reserve does not stop listing to Bush, the MBA, the U.S. is going to be in one hell of a recession. Oh thats right, it will be Bill Clinton''s fault.
Posted by bthrasher102 at 03:41 PM : Sep 13, 2007
Yes. Maybe Bush would have stayed out of Iraq and I would be getting more than 1.5% on my savings. Why put money in savings when you can borrow at such low rates. The odds of a recession in the next year have risen from 25 to 50 percent. If you are smart you will get out of the stock market now.
Prepare for the day when we will be all working the fields growing rice, like the Cambodians did under the Khmer Rouge, while the big shot businessmen and political crooks will be laughing at us from their offshore villas.
LONG LIVE THE AMERICAN DREAM (PROBABLY NIGHTMARE)!!!
SIG HEIL, BUSH!!!
If you believe his story then you must be part of the same group that believes the US government has done all it can to stop illegals from crossing out borders.
Wake up. Both of these disasters happened knowingly without government intervention because both benefit wealthy business owners and stockholders. Period.
Besides, we''re a global marketplace in a globalized economy. Neither side has much of a footing, because we wouldn''t give enemy countries technology and jobs; that and other events have shown China was our friend. Bill Clinton certainly thought so by giving them the MFN status...
it will never happen moonbat...
FASCIST NAZI TERRORISLAM / PERFECT EXAMPLE OF FASCISM!!!
Fascist nazi terrorislam is intent on killing or enslaving all non muslims......
Why is there no muslim country that grants equal rights to non muslim citizens???
The most notable characteristic of a fascist country is the separation and persecution or denial of equality to a specific segment of the population based upon superficial qualities or belief systems.
Simply stated, a fascist government always has one class of citizens that is considered superior (good) to another (bad) based upon race, creed or origin. It is possible to be both a republic and a fascist state. The preferred class lives in a republic while the oppressed class lives in a fascist state.
http://www.couplescompany.com/Features/Politics/Structure3.htm
DEMONIC-RATS SOLD THE USA OUT TO CHINA!!!
The tale of shady Chinese Clinton donors avoiding U.S. justice is a familiar one that dates back to the 1996 Clinton-Gore fundraising scandal known as Chinagate. The Clintons took millions in laundered foreign campaign donations from Chinese Communists in exchange for liberalizing trade policy with China, dropping pending indictments against influential Chinese figures, spots on a U.S. trade mission and overnight stays at the White House.
Many of the Chinagate donors were successfully prosecuted even though Clinton Attorney General Janet Reno blocked investigators%u2019 efforts at the Justice Department. More than 100 people connected to the fundraising scandal fled the country, however. Norman Hsu seems to be following their lead.
http://www.corruptionchronicles.com/2007/09/hillary_donor_flees_like_china.html
and you thought gonzales was bad...
HSU A NO HSU AT HEARING%u2026 LOL
Democratic Donor a No Show at Hearing
http://apnews.myway.com/article/20070906/D8RFKG500.html
Dems Dirty Donor Norman Hsu Fails to Show for Bail Reduction Hearing Leading to Speculation He''s On the Run
http://www.foxnews.com/story/0,2933,295828,00.html
china buys usa elections???
http://www.google.com/search?hl=en&q=chinese+campaign contributions democrat
Big Source of Clinton''s Cash Is an Unlikely Address
Family''s Donations Closely Track Those Of Top Fund-Raiser
http://online.wsj.com/article/SB118826947048110677.html?mod=hpp_us_whats_news
Report: Hillary Clinton Big Money Donor Wanted for Grand Theft
http://www.google.com/search?hl=en&q=Hillary Clinton Big Money Donor Wanted for Grand Theft&btnG=Search
http://www.foxnews.com/story/0,2933,295031,00.html
Leading Clinton Donor Stays Below the Radar
http://online.wsj.com/public/article/SB118835199704811801.html?mod=blog
''DIRTY CASH'' MAN FLEES
http://www.nypost.com/seven/03042007/news/nationalnews/pro_clinton_dirty_cash_man_flees_nationalnews_christine_field.htm
RNC pushing the China angle
http://www.politico.com/blogs/bensmith/0807/RNC_Pushing_the_China_angle.html
Democrats Turn From Big Donor Who%u2019s Fugitive
http://www.nytimes.com/2007/08/31/us/politics/31hsu.html?ei=5065&en=c3f5afa614172532&ex=1189224000&partner=MYWAY&pagewanted=print
SYSTEMIC CORRUPTION IN THE DEMONIC-RAT PARTY
FBI arrests 11 NJ officials for bribery
All of them are Democrats.
http://www.nj.com/news/index.ssf/2007/09/fbi_arrests_11_nj_officials_fo.html
systemic corruption in the Democratic Party
Corruption sting crosses N.J.
12 charged in a widening investigation that began with contracts in an Atlantic County school district.
http://www.philly.com/inquirer/local/20070907_Corruption_sting_crosses_N_J_.html
Hillary campaign honcho among 11 busted in N.J. sting
http://www.nydailynews.com/news/wn_report/2007/09/07/2007-09-07_hillary_campaign_honcho_among_11_busted_.html
11 Arrested in N.J. Corruption Inquiry
http://www.nytimes.com/2007/09/07/nyregion/06corruptCND.html?em&ex=1189310400&en=b504d6c2fbd19cba&ei=5087%0A
Castro''s tip: Clinton-Obama the winning ticket
http://www.reuters.com/article/politicsNews/idUSN2825114320070829?feedType=RSS&feedName=politicsNews&rpc=22&sp=true
Kathleen Willey: Clintons stole my manuscript
House burglary over weekend targeted copy of book days after details leaked to press
http://www.worldnetdaily.com/staticarticles/article57498.html
Posted by lars008 at 02:59 PM : Sep 14, 2007
Actually the most notable aspect of a fascist country is the belief in the supremacy of the state over the individual, plus a darwinistic right-wing philosophy. Read the writings of Mussolini, for example. Perhpas I should point out that Mussolini was a famous actual fascist from history, for those who like George Bush had a C+ average and skipped history class.
The Darwinistic right-wing philosophy is also an important component to fascism, as there have been several other state-centric government systems that were based on left-wing collectivist philosophy.
By these criteria, Islam meets the criteria of extreme right-wing philosophy in social matters, but it is not Darwinistic because ther isn''t that strong pseudo-capitalism where the strong survive, or the rich get richer, or the rich deserve to be rich. Islam is also not state-centric, it spans many states and considers the nation/state to be secondary to religion. A very bad candidate for the label "fascism", while George Bush and his followers such as lars are very good candidates for the label "fascism".
It will be funny to watch Alan Greedscam squirm and sweat, as the level of anger against him grows, for having ceated the housing market bubble and the unfolding collapse, out of his own stupidity, short-sightedness, and greed.
"LITTLE VALUE WAS PLACED ON RIGOROUS ECONOMIC POLICY DEBATE OR THE WEIGHING OF LONG-TERM CONSEQUENCES BY THE BUSH ADMINISTRATION. GREENSPAN UNSUCESSFULLY URGED THE WHITE HOUSE TO VETO "OUT-OF-CONTROLL" SPENDING BILLS WHILE THE REPUBLICANS CONTROLLED CONGRESS.
REPUBLICANS "DESERVED" TO LOSE THE CONTROL OF CONGRESS IN LAST YEARS ELECTION BECAUSE IN THEIR WILLINGNESS TO APPROVE SPENDING MEASURES THAT WOULD BENEFIT REPUBLICANS EVEN AT THE COST OF FISCAL PRUDENCE, THEY " SWAPPED PRINCIPLE FOR POWER''
STAY THE COURSE................
complete idiot not to think people wouldn''t jump on this and go and buy a house knowing they had **** poor credit. Idiot Bush will of course bail out the banks, but it sure looks like to me the buyers who signed those hefty mortgages will lose their homes. They should have understood what they were signing......
There was never a reason to put the interest rates below 5%, let alone below 2%. There could never be a reason, short of catastrophic tradgedy such as the loss of half the nation, to keep interest rates below 2% for four years.
Alan Greenspan said it best when he said himself that inflation (and by the same argument any wanton increase in he M2 money supply whether ro not you call it "inflation") is the most evil kind of tax. too bad his younger self didn''t commit suicide, and save us all the giref we are embarked upon.
things, and we just ''vanish'', as ''unnecessary''.
see, we''re ''deadweight''. corporate streamlining.
and bill gates and melinda will have their
train set to play with.
It is a policy designed by the Elite for the Elite which they repeat at intervals and at a monumental cost to usually ordinary but naive people. Even if they cannot make the desired margin per property immediately they will place it on the rental sector until prices improve, it''s win, win and is repeated all over the country a million times. However deep the so called depression is hyped up, the crooks clean up.
Oh! and they love developers with a street full of new unsold properties, someone up the line is going to take his profit when they call in his loan too.
On a partially related note, are there tax breaks for commercial property left empty?
How dare CBS pander so...
Low interest rates destroyed motivation for savings accouts. Low rates prevented workers from saving. Who would open a saving account, paying 2% interest or less. After inflation and taxes - It is a loss.
Money was diverted into other assets. Stock Market bubbles and Real Estate Bubbles.
Greenspan was the cause - Not the cure.
Now we are a nation, with high debt and low savings.
The Greenspan experment did not work.
Low rates
To correct the problems caused by ultra-low interest rates - Interest rates will have to be raised above the norm.........
The out come. Debt held by Japan and China will crash. China has never experienced the downside of capitalism.
Higher rates will result in lower debt levels, and higher savings.
Aren''t there editors who review this *** before it''s aired? I just lost a LOT of respect for 60 minutes!
What other MYTHS are you reporting on?
What a sham! What a disgrace to mislead the American Public on this issue. Fed Reserve is NOT part of the Federal government at all...and anyone who controls the money...Controls the People!
Abolish the Federal Reserve NOW!
LS asked if he invests after leaving "the government"? The Fed Reserve is NOT a government entity! A private banking institution that makes money off the American taxpayers, keeping the public in a state of serfdom. Get your facts right, and tell the truth!
But, as ususual, they whitewash any hatred of this administration, and it''s inept handeling of the War, and the american public at large.
Her lack of understanding indicates she was the wrong person for the interview. Don''t any of the 60 minutes crew have more than a journalism education...... somebody (the producer?) has got to know the subject to make it work.
As much as I respect Greenspan''s dedication to his Fed role, I do think he could have waited a little while longer before publishing. I don''t think he needs to justify his performance nor his decisions. He did a good job. His only other reason for the book would then be publicity which I always thought was below him.
never had to work anymore, and we had to import
foreign labor to do all the real work. and lo
and behold there were more foreigners in america
than natives. and lo and behold the foreigners
now own america. and lo and behold the national
debt is now 9 trillion dollars. and lo and behold
everyone became beholden way in debt, and lo and
behold nobody could pay the inflated price, and
besides the foreginers had all the money. and
lo and behold the pay toilet, 60 dollars a flush
came into being, including taxes.
Alan Greedscam will bear the brunt of the blame for destroying the U.S. economy, and sending us into a deep and painful recession.
His idiotic and greedy policies will almost certainly lead to crippling stag-flation.
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