Greenspan & Keating's Legacy
Bill Fleckenstein gives another installment of The Contrarian Chronicles on the housing and credit bubble. Just a snipet for those Greenspan fans out there...
Ironically, in 1985, as a paid consultant to Charles Keating's Lincoln Savings & Loan, Greenspan proclaimed that its management was "seasoned and expert" -- with a "record of outstanding success in making sound and profitable direct investments."
He later wrote a letter to Edwin Gray, then-chairman of the Federal Home Loan Bank Board, telling Gray to "stop worrying so much," and "that deregulation was working as planned." Greenspan noted 17 S&Ls that had just reported record profits.
Within four years, 15 of those 17 institutions were out of business, costing the Federal Savings & Loan Insurance Corp. $3 billion.
And we all know what happened to Lincoln S&L and Charles Keating, don't we? Doesn't this give you a warm fuzzy feeling? Gives ya something to kinda look forward to don't it?
Ironically, in 1985, as a paid consultant to Charles Keating's Lincoln Savings & Loan, Greenspan proclaimed that its management was "seasoned and expert" -- with a "record of outstanding success in making sound and profitable direct investments."
He later wrote a letter to Edwin Gray, then-chairman of the Federal Home Loan Bank Board, telling Gray to "stop worrying so much," and "that deregulation was working as planned." Greenspan noted 17 S&Ls that had just reported record profits.
Within four years, 15 of those 17 institutions were out of business, costing the Federal Savings & Loan Insurance Corp. $3 billion.
And we all know what happened to Lincoln S&L and Charles Keating, don't we? Doesn't this give you a warm fuzzy feeling? Gives ya something to kinda look forward to don't it?
Comments