Greenspan: It's a 'credit tsunami'

[snickers1]

TweetFormer Fed chairman says crisis will pass, and U.S. will end up with 'far sounder financial system.'


By Aaron Smith, CNNMoney.com staff writer
Last Updated: October 23, 2008: 10:26 AM ET

NEW YORK (CNNMoney.com) -- Former Federal Reserve Chairman Alan Greenspan told a House committee Thursday that the nation will emerge from the current credit crisis with a "far sounder financial system."

"We are in the midst of a once-in-a century credit tsunami," Greenspan told the House Oversight and Reform Committee.

Greenspan said that whatever regulatory changes are made to respond to the crisis, "they will pale in comparison to the change already evident in today's markets."

He said that markets "will be far more restrained than would any currently contemplated new regulatory regime."

"Investors, chastened, will be exceptionally cautious," he added.
In opening statements, Rep. Henry Waxman, D-Calif., committee chairman, said the current economic crisis could have been prevented "if regulators had paid more attention and intervened with responsible legislation. The list of regulatory mistakes and misjudgments is long and the cost to taxpayers and the economy is staggering."

Greenspan offered some proposals for regulatory changes in his testimony, namely "to require that all securitizers [of loans] retain a meaningful part of the securities they issue."

Former Treasury Secretary John Snow and SEC Chairman Christopher Cox are also scheduled to testify.
Snow and Cox, in written testimony released before the hearing, both suggested that greater transparency be imposed on the markets.
Snow suggested a "more coordinated and less fragmented approach to financial regulation" with "greater international cooperation."
Cox said the SEC has adopted measures to strengthen investor protections against naked short-selling, which allows short selling without owning or borrowing the stock.

He said he has also launched an examination "of the effectiveness of broker-dealers' controls on preventing the spread of false information."

[quirkysmilin]

TweetI agree....I think that you can compare it to someone being burned....you get burned, you think twice about making the same mistakes. Also, I think folks will think more about frivilous spending and there will be less crappy shit made that will eventually clog our landfills. Did you hear the .99 stores are going out of business? People dont want to spend their hard earned money on shyt anymore - quality will rise again. (hopefully) Walmart will be the next to go down!!! Muwahahahah!!!

[trip]

Tweet99 is not goin out of biz, it's closing stores in texas, that's it

leverage leverage leverage

derivatives derivatives derivatives

that's the greenie legacy


life will go on, we live like we live because we can

this is debt destruction going on due too leverage, prudence will pay and overleverage will go broke

thatza life

[3Vandoo]

Tweetstop listening to the media

half of the market hysteria is because of the media and so called reports....

Allan Greenspan told his wife while on the bowl, thats a hard shit honey

dow drops 3%

[straydoglogic]

TweetSHOULDA LISTENED TO RON PAUL!!!

and i mnot one to ever ever ever ever defend the media..so i wont

but greenspan did say he made a big mistake...