Rolf Englund IntCom internetional
Alan Greenspan, Financial Times, August 4 2008
The /banking/ insolvency crisis will come to an end only as home prices in the US begin to stabilise
This crisis was not brought to closure by the world’s central banks’ injection of huge doses of short-term liquidity. Only when sovereign credits were substituted for private bank credit, first in the case of the UK (Northern Rock) and subsequently in the case of the US (Bear Stearns), was a semblance of stability restored to markets.
Capital gains cannot finance new physical investment, but do add to global net worth.
The economic edifice – market capitalism – that has fostered this expansion is now being pilloried for the pause and partial retrenchment. The cause of our economic despair, however, is human nature’s propensity to sway from fear to euphoria and back, a condition that no economic paradigm has proved capable of suppressing without severe hardship. Regulation, the alleged effective solution to today’s crisis, has never been able to eliminate history’s crises.
It has become hard for democratic societies accustomed to prosperity to see it as anything other than the result of their deft political management
These are historic moments for the world economy.
"The critical issue on the whole subprime, and by extension, the international financial system
Central Bank's monetary policy was not the primary cause of
Greenspan's errors in judgment seemed so obvious they beg the questions: