Greenspan, the former Federal Reserve Chairman, told a Congressional hearing that the credit crunch exceeded anything he had imagined; he goofed in thinking that banks would act intelligently to protect themselves from risky mortgages.
“I made a mistake in presuming that the self-interest of organizations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” Greenspan said.
Housing prices ballooned for about 10 years, ending in 2006. The run-up was great for people selling (or flipping), and wonderful for real estate agents who pocketed easy commissions. But Greenspan said, “The housing bubble became clear to me sometime early in 2006, in retrospect.”
That’s helpful - weren’t the cracks in the housing market apparent by then? But retrospect just doesn't cut it.
Thanks for the insight, Alan. The current mess didn’t require gazing into the future - only accurately assessing the then-current situation.
Of course, that’s easy to say in retrospect, if you’ll pardon the expression.
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