Wonder of wonders. A TB post that's about the financial meltdown, instead of the Grand Kulturkampf-Pissfest

So government cash handouts to bad-behaving banks, brokerages, and companies is good. But government regulations against bad behavior by banks, brokerages, and companies is bad.

Considered objectively, doesn't that make Greenspan a supporter of the bad behavior by banks, brokerages, and companies?

Ahh yes, one of the two good outcomes of this; the end of Greenspan's reputation.

The Alan Greenspan who wrote the following words is presumably not the Alan Greenspan who wrote the FT article:

-- Rising debt service ratios are a concern if they reflect household financial stress and presage a drop in consumption or a rise in losses by lenders. Most homeowners and renters are aware of the possible difficulties should they lock themselves into a high level of debt payment obligations. Financial institutions might be able to help some households in this regard by looking for ways that households--both renters and homeowners--can shield themselves from unexpected payment shocks.

-- One way homeowners attempt to manage their payment risk is to use fixed-rate mortgages, which typically allow homeowners to prepay their debt when interest rates fall but do not involve an increase in payments when interest rates rise. Homeowners pay a lot of money for the right to refinance and for the insurance against increasing mortgage payments. Calculations by market analysts of the "option adjusted spread" on mortgages suggest that the cost of these benefits conferred by fixed-rate mortgages can range from 0.5 percent to 1.2 percent, raising homeowners' annual after-tax mortgage payments by several thousand dollars. Indeed, recent research within the Federal Reserve suggests that many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward.

-- American homeowners clearly like the certainty of fixed mortgage payments. This preference is in striking contrast to the situation in some other countries, where adjustable-rate mortgages are far more common and where efforts to introduce American-type fixed-rate mortgages generally have not been successful. Fixed-rate mortgages seem unduly expensive to households in other countries. One possible reason is that these mortgages effectively charge homeowners high fees for protection against rising interest rates and for the right to refinance.

-- American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage. To the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home.

www.federalreserve.gov/.../20040223

Greenspan lost all credibility years ago, in particular when he practically endorsed the Bush tax cuts.  Nothing coming out of his mouth is to be believed anymore.

Greenspan -- he still hasn't got over his thing with Ayn Rand.

He's a clown, and this is largely all his fault. He needs to finish up his career by actually going to Clown College. Remind me to spit on the Rand fans next time I see their little tour around Ayn Rand Manhattan sites...

Via Avi Zenilman at The Politico , I see Hillary has recommended that Alan Greenspan serve on a "high