We will never have a perfect model of risk

News Type: Opinion — Seeded on Mon Mar 17, 2008 12:40 PM EDT

Article Source: FT.com

business, economy, finance, recession, credit, greenspan

"The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the second world war. It will end eventually when home prices stabilise and with them the value of equity in homes supporting troubled mortgage securities."

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{"commentId":1589716,"authorDomain":"tgolferman"}

tgolferman

Greenspan (G) and the Bush Administration (BA) had to know back in 2000 - 2001 that Real Estate was being propped up to keep the U.S. from entering into a major global slowdown. G's techno speak can make you believe something you know to be false. How we could have been fooled into believing that U.S. real estate was going to keep us safe from global economic trouble proves that P.T. Barnum was right when he said "there is a sucker born every minute" and that the U.S. suffers from arrogant ignorance.

G and BA should have also known that going to war expecting foreign purchases of government debt to fund the campaign and praying that inflation did not rear its ugly head was and still is ridiculous. Inflation is rampant yet fighting inflation with interest rates is off the table because of the economic mess we are in and the dollar continues its tumble.

The economy continues in a separate death spiral because we have allowed profiteers to convince us that off shoring and outsourcing would keep inflation in check. Eventually these misguided free trade tactics shrink the economy and the result is exactly what is going on right now.

China has got to be laughing at the U.S. right now. China, being the last capable defender of Communism, is having what appears to be possibly the last laugh at the expense of the United States. All after we defeated the Communistic system during the Cold War with the U.S.S.R. China has stolen a lot of our productive capacity with the promise of great profits normally associated with slave labor expenses. They control both ends of the Panama Canal shipping ports. They hold massive amounts of our currency and government debt like the House of Saud does. We are no longer in control of our economy or government. Campaign cash has been clouding the judgment of most of our elected leaders for quite some time and they can no longer dictate the terms of the fight. We are spending trillions on the war on terror; we are giving ourselves a stimulus dividend check that we cannot afford.

If the trouble G, BA, and Bernanke has us in were taking place in China they would have already faced a firing squad I think.

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#1 - Mon Mar 17, 2008 6:29 PM EDT

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MIKE HAW

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We will never have a perfect model of risk

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