Sure the Community Reinvestment Act (a totally crony law) had something to do with housing’s abrupt rise and fall in this country. And there were other factors besides Fed policy. But the primary reason why the global housing bubble, and before that the tech bubble, blew up and then collapsed is because of the easy money policies of one Alan Greenspan.
Now he is appearing on Bloomberg, and CNBC, and whatever show will have him to promote his new book.
We agree with the attached article that if Greenspan refuses to go out to pasture and remain there silently his only other decent alternative would to go on an apology tour, not a book tour.
(From The Guardian)
Greenspan’s “I didn’t know” excuse is so absurd as to be painful. The explosion of exotic mortgages in the bubble years was hardly a secret. It was frequently talked about in the media and showed up in a wide variety of data sources, including those produced by the Fed. In fact, there were widespread jokes at the time about “liar loans” or “Ninja loans”. The latter being an acronym for the phrase, “no income, no job, no assets”.
The fact that banks were issuing fraudulent mortgages by the millions, and that the Wall Street crew was securitizing them as fast as they could get them, was not top secret information available only to those with special security clearance. This was the economy in the years 2002-2006.