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Greenspan: The Financial Crisis Was Caused By A 'Once-In-A-Century' Event • Taleb: Any Pilot Who Doesn't Know About Storms Shouldn't Be In the Cockpit
Greenspan's big defense is that the financial crisis was caused by a "once-in-a-century" event.
Forget about the fact that the "once-in-a-century event" couldn't have happened if Greenspan's Fed hadn't:
- Turned its cheek and allowed massive fraud
- Acted as cheerleader in chief for unregulated use of derivatives at least as far back as 1999 (see this and this)
- And for subprime loans
- Allowed
the giant banks to grow into mega-banks. For example, Citigroup's
former chief executive says that when Citigroup was formed in 1998 out
of the merger of banking and insurance giants, Greenspan told him, “I have nothing against size. It doesn’t bother me at all”
- Argued that economists had conquered the business cycle, and that modern, technologically advanced financial markets are best left to police themselves
- Preached that a new bubble be blown every time the last one bursts
- Kept interest rates too low
- And did alot of other hinky things
More importantly, as Nassim Taleb repeatedly points out, financial experts who don't plan for rare events are like pilots who don't know about storms.
There are storms out there, Taleb says, and any pilot who doesn't know how to deal with storms shouldn't be flying. Similarly, no one should be in a position of financial leadership if they don't know about - and plan for - the infrequent event:
- advertisements -
It's still pretty early in the century.
Maybe Greenspan is right. Maybe only once every hundred years do ratings agencies routinely rate as AAA CDOs that are structured by cows.
Structured by cows means a CDO composed entirely of instruments with highly correlated failures (such as subprime mortgages at the peak of a real estate bubble)
"Never attribute to conspiracy that which is best explained by incompetence."
When dozens of large, (temporarily) well capitalized financial institutions build high-speed bullet trains to deliver marginal credit product into twisted-tranche paper for an underfunded pension plan before the 22 year-old with $99 and a job gets the BMW 7-series off the lot...
Seriously... if the Bears, Lehmans, Citi/Sollies... the Greenbergs and the O'Neils and the Sandys and the Macksters... if all those cats, doing God's work, are on that train, I don't care if you're Winston Frigginchurchill, you are not stopping that blitzkreig. If any regulator or government agency made the least attempt to throttle that thing, the laissez fairettes would have legitimately dragged them off to Guantanamo for a good old H2O-2x4 session.
If the CEO's and the Risk Committees and the Audit Committees and the Buyside and the Ratings Agencies didn't do their jobs, control toxic product and understand the leverage, well, let's blame that old guy - it's obviously his fault.
Time to stop looking out the back window folks.
Taleb: "It's a beautiful theory that tells you the following: I would rather make 100 times $1, rather than 1 time $100. This he calls the 'Convexity of the Utility in a Positive Domain'"
Jesus christ, please shut the fuck up Nassim. The "Rome, Mozarella, infinite lunches" preamble was bad enough, but the above theory sums up everything I hate about our so called "economists". Inanity dressed up as complexity -- and a room full of douchebags nodding their heads like something original was just said.
How much were the tickets to this circus?
My long term indicators warned me in EARLY 2007.
Charts don't lie.
http://www.zerohedge.com/forum/latest-market-outlook-0
It's not the f_ing 'black swan', it's the flock of pigeons (flying rats) sh_ting all over us that they should be talking about (and I include Taleb in that for giving people like Greenspan cover). I liked Fooled by Randomness, but this whole 'black swan' thing makes me sick. "How could we have known? Look Nassim is so smart and self-absorbed that it even surprised him, blah, blah, blah ... ." Enough of this left tail excuse stuff, the destruction of a financial system and hollowing out of an economy is not a 'black swan', it took decades and alot of effort. Tens of millions thrown out of work is not a one day surprise. The date when it began to adversely affect the TBTF was somewhat grey, but a complete surprise? The first step in solving a problem is at least admitting to it, not denying it, and certainly not calling it the statistical equivalent of some act of God when it is clearly an act of men who have no clue and/or hate most of us.
Bingo.
The $1.6-trillion in bad mortgages was from criminals working as mortgage brokers, together with the CDO packagers.
The $2.4-trillion in "Consumer Credit" titled/listed assets that filled the "house" bets in the CDS casino were minted out of DB and GS, misrated as AAA by the paid-10-times-over folk at Fitch/Moodys/S&P. The most of the buyers had no idea they were doing nothing but placing bets -- much less bets on the Sand State Slop.
Greenspan and Gramm and The Squid made it happen.
Screw the world ??? They're narcissists. Don't give a sh*t.
81 % of Las Vegas homes are underwater.
S&P almost up 81 %
Yes, the economy must be in great shape.
Get a fuckin' clue folks.
Re: Alan Greenspan, John Paulson, Credit Default Swaps
http://online.wsj.com/article/SB120036645057290423.html?mod=todays_us_page_one
I just don't see why people cannot connect the dots on the "Greenspan put"
It was orchestrated and premeditated .
The plan was Machieavellian.
The intent was draconian.
It was the largest property crime in the history of the human race. They got away with it.
The people with the pitchforks and the lynch mobs are incapable of critical thinking and seeing any further than Brittiany Speers last crotch shot.
Audit the damn Fed!!!
That will take too long, just end it in 2012 (I don't trust Obama to create the alternative.)
He calls it a once-in-a-century event because he knows he help orchestrate the collapse at the wishes of the banking Cabal
the voice of reason.
Greenspan is the poster child of incompetence and/or stupidity. An illiterate and innumerate in charge of the grand money and credit scheme.
I fully agree with Capt. Willard that it is preposterous to call this collapse a Black Swan event. This was the hangover in the morning after the all-nighter .
As demonstrated by Leo-an entirely predictable outcome- the only unknown being the precise timing of the "cupboard is bare" conclusion.
Greenspan should slink away to his cave.
That mumbling bag of wind, Greenspan. And yet everyone thought he was some kind of genius when things were going well. They called him "The Wizard". Greed and ignorance blinded American investors--he and his cronies rode Brookley Born outta DC on a rail when she tried to warn the ptb. He should be hung for his crimes.
The Dork of Cork is making a very important point. What gets lost in all this monetary policy, behavioural finance and risk management discussion is the real economy.
Wages grew too fast in Europe. Productivity growth in the US slowed. The emergence of China hollowed out Japan. Leverage covered it all up for awhile. But as Elvis Costello said: "There are some things you can't cover up with lipstick and powder".
All the geniuses lost track of these real developments. In order to keep the system growing, they allowed more leverage. Bankers were ready to play the game and readily geared up. And in an odd way, increased systemic leverage was interpreted by central bankers as an "homage" to central bankers. After all, the prospect of more stable, better-managed economies enables greater systemic leverage. Greenspan, flattered by the compliment implied by greater leverage, permitted even greater leverage. And so on, into the abyss... a negative feedback loop.
Taleb, a smart man who makes good points about the need for empiricism and scepticism, bangs on too much about rare events. As the Dork points out, nobody paid basic attention to real economic data. They didn't need to worry so much about Black Swans. These assholed weren't even looking out the window, never mind looking at the pond.
Second video was far more important, and I thank you for posting this interesting discussion between Daniel Kahnemann and Nassim Taleb. I agree with much of what Taleb says but he is missing a crucial piece of the puzzle, pensions and their role in the crisis. By investing trillions into hedge funds, commercial real estate, private equity, and commodity funds, they played a central role in increasing the leverage of the financial system. As I stated in my outlook 2010, it's not about Black Swans, but Black Sloths.
As for Greenspan, an ideologue can't see the errors of his ideology because it becomes a religion to him - a matter of faith. It is utter nonsense to say he didn't see this coming as he was one of the architects of this grand theft by the banksters. I'll show you one chart below to demonstrate my point:
Only an idiot didn't see this that the US banking and insurance industries were taking massive risks - which they passed on to other investors, like pension funds. I voiced my concerns and it cost me my job, but in the end, I was right, not that it matters because it didn't prevent massive losses on pensions. And now, they're back to the same old song & game.
what job ?
What Dr. Doofus doesn't say is that the results of a 'once in a lifetime event' can last for several lifetimes, or as long as this ball keeps from spinning off along with the entire milky way into another galaxy. Or getting sucked into a black hole.
It's not that the holocaust happened, it's that the jews will never let you forget about it. It's not that slavery happened, it's that they will never put it behind us. It's not that Reality TV was concocted, it's that now its the only thing that makes the "Unhappy Illegitimate But Very Rich Children of NBA Players", a reality. It's not that the atom bomb was invented it's that it will never cease to be a global threat of our annihilation forever.
It's not that he lowered interest rates to pay off the Investment Banksters, and the real estate lobby, along with all the politicians, it's that he has single-handedly created a multi-generational theft of all the good things that will be produced by the middle class for the rest of the time that those now living have and the yet unborn for a hundred years or more.
Once in a lifetime, my pink-white ass.
Wiki the Irish Great Famine and tell me that this doesn't look like genocide and slavery to you, along with forced explusion.
How in the hell is this different from the black or jewish experience? There are less fucking people in Ireland NOW than in 1840.
Have you ever heard this story? Does it have commercial free movies that get slathered with Oscars? Do you see the "no Irish" signs as part of a history month? Anyone talk about Coffin Ships and the sharks that used to swim behind them looking for a predictable meal?
I'm sick of the monolithic narrative...there is no real diversity in power in this country. Our parasite class only got stronger.
hmm i wonder why joos have been expelled over 100 times for the same chicanery. they infiltrate, destroy, and profit; preferably getting the shabbos goy to do the dirty work, e.g. p. pilate, white house puppets, wars for israel, etc.
http://www.biblebelievers.org.au/expelled.htm
actually there's more to it than just financial shenanigans:
http://www.thewatcherfiles.com/jewish_sacrifice.htm
http://www.talmudunmasked.com/chapter15.htm
you think there might be another christian holocaust in the works?
http://www.rense.com/general86/realholo.htm
byzantine empire had the answer:
http://www.fourwinds10.com/siterun_data/history/zionism/news.php?q=12623...
check out al's elusive thesis:
http://online.barrons.com/article/SB120675340444773623.html
even ben franklin warned america, about jewish threat
Picture this if you can:
Treasury Secretary- Carmine Corleone
FED Chief- Bruno Battaglia
CFTC - Chairman- Lucca Brazzi
FDIC - Chairman- Mary Bonnona Brutafaccia
Goldman Sucks - Chairman- Anthony "Big Tony" Tataglianese
SEC - Chairman- Fredo Corleone
World Bank President- Chicco Albanese
International Monetary Fund- Big Jefe- Louie Catanessio
Morgan Stanley- President- Gabriel "the Angel" Capone
JP Morgan - President- Giacomo Agnelli
New York Federal Reserve- Chairman- Augustio DiGirolomo.
The lack of diversity should be an indication that some tiny group is in complete monopolistic control of every key nexus in the global financial community and with rare exception, they are all Sicilians.
Even the Corleones had an Irish Consigliere.
Substitute Irish Names, or Serbs, Mexican, Germans, Latvians, Chinese, Japanese, for the above, and see what conclusion you cannot help but come to. It sure ain't coincidence and merit, my friend.
Don't stop there.
Go to the original politburo led by Lev Bronstein, err...I mean Leon Trotsky. A little over half of them were clan members.
You've got 5/5 major Hollywood studios founded by clan members. Antiwhite advocacy groups like the NAACP. Look at their history and leadership until 1973. Nevermind the other ancillary ones like the SPLC and whatnot. They still haven't turned over the reins.
The father of "psychiatry," as well as the father of propaganda. And many of them worked together to help the ole clan out or for this or that member to get rich.
The two main antagonist parties after the Weimar collapse with its "jew confetti" were the NSP and the Communists. The latter was associated very heavily with the clan, given its origin with the Bolsheviks. In fact, marxism worldwide was associated with the clan and was spearheaded by it. Here, Europe, all over. No freakin clue as to the affinity, Marx was only 1/2 jewish.
I have this conversation sometimes with some of the clan I know and there are those who recoil at having their face on the poster of this catastrophe. They really wish there was a little more heterogeneity in the principals, because they see potential for this to lead into another really dark place, like Belzec dark.
I would much rather see these criminals just jailed, and if that's not equal opportunity, then so what?
As long as you replaced Obama with Michael Corleone, I'd say your list would do a lot better than the gangsters that are running things now.
At least the Mafia was pretty straight about what they were about. Our leaders pretend to be humanitarians saving the planet, the economy, poor people, people without health carepeople with health care, the middle class blah blah blah. But every progressive law ends up with one effect--enhancing the power and money held by progressives.
Taleb wants to nationalize banks
But not before he gets rid of the existing government b'crats --- which is difficult becuase their is no responsible b'crat they are insulated
But when he nationalizes banks they will become b'crats and no longer responsible ---- as a matter of fact the biggest too big to fail institution is the FEDERAL Reserve. And have a Government granted monopoly
Presidents are much like ancient doctors ---- they have to do something even if it causes harm --- because they and the people around them will think they have the map outta here ---- if they do SOMETHING
Economico Buffa
http://3.bp.blogspot.com/_H2DePAZe2gA/S60l8HATYTI/AAAAAAAAMRQ/v7zJgwqg1W...
these guys are interesting from a sociological standpoint. apparently, when a mass of people engage in collectively reinforced stupidity, and it ends badly, many find it comforting to hear from a pair of greybeards that the bad ending was an utterly unpredictable fluke.
for anyone else who had the misfortune, as I did, to give any of these babbling bald heads a hearing, I extend my deepest sympathies. Taleb's incoherent stammerings about the need to eliminate the systemic fragilities of risk vis á vis the incalculable nature of his black swan event and the futility and inherent errors of economic modeling make as little sense as the disingenuous and self serving rationalizations which Greespan employs to cover his obvious criminal malfeasance.
The crack pot and insipid psychobabble of "Danny", our Nobel laureate, displays the convoluted, ineffectual and sterile intellectuality of an effete and hopelessly abstracted pedant whose lack of any real substance is typical of the delimited and irrelevant perspective which comes from taking ones fodder in the comfortable stalls of academia.
This useless exercise just serves to demonstrate that the world is alternately in the hands of elitist social engineers who contrive to subvert, undermine and destroy social and economic institutions, and their intellectual and academic counterparts who publish papers and convene cozy forums to explain it all away before flying off to Davos to sample the five star hotels. A pox on all their houses.
So, Yardfarmer, your alternative solution to the crisis is...?
Nassim Taleb needs to take over Timmay Geithner's job, expose all of the shenanigans. Maaaaaaaan, would that be a hoot to watch.
He and his chosen friends control the FBI, SEC, FDIC, Fed, Gollem Sachs, WH Budget director, house finance committee, minority whip etc... Then there are Rahm, Gensler and the head of enforcementvatvSEC too.
It is a rather amazing coincidence.
Can anyone name a Samoan in congress or capital hill ?.. Why aren't 20% of these top folks black and another 20% Hispanic ?. 6% gays ??.. Chinese american ?. Japanese ?.
Could we find some fucker named Smith in the corridors of financial power and enforcement ?.
Thank god for the uncorruptable Chris Dodd, Ken Lewis, Angelo Mozillo...
Unusual coincidences perhaps ???.
These things are not incidental. There is a historical president to what is happening in America now.
Back in 1917 in Russia, a gang of Jewish terrorists (a.k.a. Bolsheviks) with American and British money were able to overthrow legitimate Russian government. They called it "the worker and peasants revolution". These gangsters did not care either about Russia or its people. In just few years, using barbaric brutality and terrorism, almost 20% of Russian population were either slaughtered or starved to death. Russian workers were terribly brutalized and enslaved. As for peasants? They were "liquidated as a class". 25 millions of them were starved to death, and the rest were sent to concentration camps also known as "collective farms".
It the same time, Jewish communists and socialists all around world were doing all they could to support the terrorist Soviet Union. Jewish propaganda in America and Europe was working overtime to support "the first socialist state" and justify its crimes. Later, they would blame Stalin for all Soviet crimes.
As for the Korean and Cold War, there would not be any if Jewish spies working for Stalin did not provide the USSR with US nuclear weapon secrets including even some atomic bomb hardware. And what did America do? They just sent two low-level Jewish spies Rosenbergs to an electrical chair. As for American servicemen, they would be killed in thousands in Korea, Vietnam, etc.,
Now, after being involved in a phony war with Al Qaeda on behalf of Israel, America is facing emerging China and Russia and a disintegration of the country, its economy, and its democratic institutions. Shit!
Do you mean that there is another financial collapse with jewish fingerprints all over the scene of the crime? That where you're going with this?
Yes, I know that the bavarian producers in the Weimar period called the marks "jew confetti"...members of the clan form a rather pervasive interlocking directorate.
No conspiracy suggested but rather odd nonetheless that the media establishment would advance the agenda of advocacy groups like the NAACP, founded by unrelated clan members and who contracted Bernays to do their propaganda work. They got each other on speeddial or what?
Nothing an Asheknazi IQ and heaping dose of clan nepotism can't accomplish, and yeah a lot of this shit started long before Reinhard.
Another video on 60" where he says he would have done the same thing as BB (@ end of video). The whole video gives you an idea how it doesn't matter whose in there (FED) its gonna be the same outcome. Why, because they have an agenda.
http://www.youtube.com/watch?v=m6b4qX_qm40&NR=1
On Greenspan nobody with his knowledge and experience is this stupid. This had to be done purposely without any regard for the consequences. This video (7:59) shows him over a decade ago telling congress that the LTCM failure was an anomaly and told them not to pass regulations on derivitives, this is when congress didn't even know what a derivitive was.
At 9:35 & 9:52 in the video is where he says his ideology was wrong.
Now he says once again this is an anomaly but a bigger one. 11 yrs. ago he was saying the same damn thing.
http://www.youtube.com/watch?v=QIHLezCyzCI&feature=related
Please watch
Rickards timely chime in about LTCM and what happened next was curious to say the least. 1998 is a year worth investigating. Oh wait. That's what Don Smaltz was doing until they shut him down. God forbid a lawyer with integrity and a relentless zeal for justice in that case be allowed to discover what was about to unfold in the USA.
Rickards client list may reveal why he is out singing. Guys like that don't just sing. If I'm a guessing man I would be telling you that there is a war going on inside the Pentagon.
Green-Span? Nay say you! Nay! He is sired with honor. Nay!
Greenspan on the economy " You can see the whole blossoming of finance " - yes the rent seekers are extracting their Ton of flesh Alan but where is the productive economy?
"the claims on the real economy , forget finance ! - "its money you can always print money !"
Notice how he wanted to cut the C17 project while is unable to cut anything concerning the finance sector.
Monetarists are always concerned with a false efficiency of the economy but do not increase the production and therefore over time the ratio of debt relative to production has only one way to go - I am beginning to realise that they (Greenspan , Bernanke etc) do not visualize a physical economy but merely paper claims on assets which inevitably will run down over time while the pursue efficiency which is in reality achieving a greater rent on a declining asset
Thee most destructive American in the your History and indeed western civilisation in the last 70 years
This guy is beyond unbelievable - he should be hiding in a cave perhaps in the Torah Bora mountains anticipating a air strike that would end his pitiful existence
The biggest destruction was wrought by giving economics the respect afforded a real science.
EVERYthing to these guys revolves around their silly interest rates and imaginary "capital."
Let's you and I buy and sell the same thing back and forth and push GDP to infinity. Even their goddamned metrics are effed up, nevermind the foundational QTM equation, which is a JOKE.
Greenspasm is an Israeli, like the rest of 'em isn't he?
I guess you are only a traitor when you betray your country - but what country does he truly pledge loyalty too ? - if Greenspan is/was a intelligent logical character there can only be one answer.
Schiff who I believe is Jewish effectively called him a traitor recently also Eliot Spitzer who comes from the other side of the political spectrum is certainly no fan - there is in my opinion a cabal of Zionists actively involved in a huge wealth transfer scheme of biblical proportions - I am sure I will get a response but try as I might I cannot see any other answer to this sorry state of affairs.
Bin Laden wouldn't rub shoulders with this slouch. Green-Span wishes he was in the Carlyle Group.
Greenspan was much more of a destructive force then any tin pot terrorist wether real or not - imagine a strategic bombing campaign that destroys nearly all the production of a enemy state - that was the monetarist policey, without the moralistic messy dilemma of immediate civilian casualties
Osama's father met at the White House with George Herbert Walker Bush on September 11th, 2001. The Bin Ladins yield power. Green-Span is a pawn, a schill. He does the bidding of the Money Masters. He does not dictate policy, policy is dictated to him. Case in point, he liked gold before he was swept into "power". I give Green-Span no credit for the total destruction of the monie system. I thank Rubin for that. He is the man you are looking for, not Green-Span. Green-Span talks with marbles in his mouth. He is as intelligent as Dubya and Barry. They do not set policy, they get it dictated to them by people whome you do not recognize.
>Osama's father met at the White House with George Herbert Walker Bush on September 11th, 2001.
Osama's father died in 1967. Hard for him to have met with anyone on 9/11. Google is your friend.
Such misinformation leaves doubt as the veracity, and point, of your comment.
WOOPS! Meant "brother", the patriarch of the family, in charge of the family's trust invested in The Carlyle Group, which is also heavily invested in by Oliver Sarkozy, as well as the Bushes.
GOOGLE IS NOT MY FRIEND, thank you.
Oh, and "Such misinformation leaves doubt as the veracity, and point, of your comment"...get a life.
Point taken Hendrix - I guess it is easier to focus my anger on one person - but the very act of listening to Greenspans mumbo jumbo makes me rage against the machine.
The elite must be having a good laugh at all those Pavlov dogs out there in cyberspace
Greenspan is being insistent that government forced low rates have nothing to do with influencing real estate prices .
Without venturing any further, one now knows that the complete time period now must be in question as to many more incorrect views and opinions that Greenspan put into play.
Let me state how simple the answer to this question is.
Simple speak:
Would a r/e buyer be more interested in purchasing r/e
with a 1% mortgage or a 20% mortgage ?
Greenspan is stating that there is no difference.
The fact that Greenspan was allowed to have any influence at all for any period of time is
very telling about the system itself.
And it is not good.
And one wonders why we are in the current environment ?
He begins with his propaganda by insisting the economy = the market. Yeah, the PPT levitated market !! Yeah, like gold isn't being suppressed. And like the Fed isn't buying Treasury notes.
It will never happen again. And not for a lack of effort -
"Bright short term outlook, worrisome longer term outlook"
Not a cloud in the sky tomorrow and a hurricane arriving shortly after sunset. Don't forget the sunscreen!