Thursday, October 23, 2008

Greenspan speaks

Alan Greenspan testified on Capital Hill today. He denied blame for the crisis but but conceded the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a "state of shocked disbelief."

He called the crisis a "once-in-a-century credit tsunami". He also warned that things would get worse before they get better, with rising unemployment and no stabilization in housing prices for "many months".

It was his policy of artificially low interest rates that led to the speculative bubble.

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