Friday, March 19, 2010

Former Soviet Union to blame for housing bubble: Greenspan

I can no longer sit back and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious bodily fluids. (Col Ripper from the Stanley Kubrick film Dr. Strangelove)

Voltron says: Sir Alan Greenspan has become completely disconnected from reality.
The fall of the Soviet Union led to hundreds of millions of workers entering the global marketplace, he said in a paper to be presented to a Brookings Institution conference. This new market-based workforce, Mr. Greenspan said, helped push up growth in the developing world. This in turn fuelled a global savings glut that drove down long-term interest rates, leading to an "unsustainable boom" in house prices, he said.

Voltron says: Wow . . . just . . . . wow
A better approach, he said, would be higher capital buffers. "Capital and liquidity, in my experience, address almost all of the financial regulatory structure shortcomings exposed by the onset of crisis," Mr. Greenspan said. "Adequate capital eliminates the need for an unachievable specificity in regulatory fine-tuning."

Voltron says: Translation: we don't need regulation, we just need cash so we can paper over the fraud.

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