Thursday, March 8, 2007

More Ivory Tower

Here's a quote of Alan Greenspan from a good site (see and subscribe) =>
"Innovation has brought about a multitude of new products, such as sub-prime loans and niche credit programs for immigrants. . . . With these advances in technology, lenders have taken advantage of credit-scoring models and other techniques for efficiently extending credit to a broader spectrum of consumers. . . Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in sub-prime mortgage lending . . . fostering constructive innovation that is both responsive to market demand and beneficial to consumers." Alan Greenspan, April 8th, 2005

These clowns have no concept of the practical world. They sat on their butts while the financial industry created products to loot money from financially unsophisticated people who now can lose their homes & savings. All DC is culpable as problem was discussed widely and they did nothing.


mern said...

come on Kman. thats simply not true! when allen "dont call me elmer fudd" greenspan ran the show, he suggested to middle america that ARM's were a good idea. what was dumber, that or taking fed funds to 1% to fight "deflation". one of these decades all this butter will come home to roast, but both of us may have left our mortal shells before it happens. or its already starting to unwind

mern said...

i see the govt has cancelled its program of looking for radiation pills. im a little peeved at myself for not shorting HEPH over 5 yesterday, i was about 80% certain they wud get the heisman, but wow, they got the heisman and then run over by a bus. then a dog walked by and took a dump on HEPH. they lucky they got 2 bucks in cash

Bunkerman said...

Hey mern - what do you mean when you say, "get the heisman" ?

Hehe, I've got a good supply of radiation pills, of course.

mern said...

u know what the hiesman trophy looks like, right?

running back stiff arming.

its implies and smacking u in the head


lets use it in another sentence.

when mern was in college many females gave him the hiesman


Bud said...

Wow. Kind of chilling to read that comment by the 'maestro'. Agree on everything you say Bunkerman. I will add this though....these so-called financially "unsophisticated" people weren't complaining when their house values were rising and they were pulling equity out of their homes to buy a new sports car. Reminds me of all the "unsophisticated" investors who were doubling and tripling their money in the stock market during the bubble ( all on margin). When the bubble burst all of a sudden they did not know how margin worked ( or options). DC and the lenders are at fault here no doubt......but the borrowers are too.

Bunkerman said...

lol re heisman.

btw, I've had trouble with that Yahoo Messenger lately - getting kicked off & can't log in again. It's odd.

mern said...

nibble some vix calls for bud

Bunkerman said...

I agree with you, Bud, with respect to home speculators using those products to speculate & suck out cash. But I suspect many first time home buyers got suckered by mortgage broker sharks into buying too much home via a teaser interest rate / pay rate. I was thinking of the latter.

Greenspan was a totally irresponsible fool or knave pushing ARMs and fancy mortgage products when fixed 30 year rates were near generational lows.