Good digging by Mish. Here are my comments posted to this one:

Ok so let me get this straight -- McCulley calls for a housing bubble, Greenspan complies, Greenspan gets job at PIMCO?

In fact, here is the full timeline:

  1. Early 80s: Greenspan completes ground-breaking PhD thesis on housing bubbles, home equity extraction, and the effect on the broader economy. Thesis is buried. Greenspan moves from Council of Economic advisors to fast-track to Fed chief.
  2. 1987: Greenspan makes Fed chief.
  3. 1996-1998. Greenspan sabre-rattles about "irrational exuberance"; fails to do anything to stop it.
  4. 2000/01: NASDAQ bubble pops.
  5. 2002: McCulley, et al., call for aggressive housing bubble generation. Greenspan complies; holding rates low to an insane level till 2004.
  6. 2004: Greenspan jeers at people who choose fixed-rate mortgages over ARMs (while interest rates are at his artificial 1%; making fixed-rates the smarter deal).
  7. late 2004 onward: Interest rates go up, 1% indefinitely makes it look like we're still in a recession.
  8. 2005: Housing bubble clearly overheating; Greenspan denies he sees it. Keeps raising rates, though.
  9. 2006/2007: Bubble finally pops due to its own exhaustion.
  10. 2007: Having successfully created the bubble and denied responsibility, Greenspan goes to PIMCO.
  11. PIMCO seems eerily ahead of the curve in anticipating government bailouts, including bond backstopping of all sorts: Fannie/Freddie, Treasuries (quantitative easing), GMAC, etc. New catchphrase: "Don't fight the PIMCO"?

So... is it Congressional subpoena time yet?



catherine at 12:21 2009-06-16 said:
been asking for Greenspan and Rubin to do the perp walk for over a year now.............it is coming........later than sooner............but it is coming.........

the Congress will throw these guys on the heap to try and distract the sheeples from themselves but we are coming for them too.........distractions will only work for so long............ Permalink

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