Chief architect of financial debacle calls it “once-in-a-century” crisis

This from Alan Greenspan, whose Ayn-Rand-influenced, anti-regulatory, easy money policies at the Fed were a primary cause of the current financial crisis. He of course, takes no blame for any of it. Life is so simple when you are an extremist ideologue and convinced of your inerrancy.

Yes, I’m blogging a lot about this. But the multiple collapses of major financial institutions is not business as usual, and will impact all of us. Banks will close. Loans will be even harder to get. Companies will have layoffs or go under. Pension funds will take big hits, municipalities too, as they park money is supposedly safe investments too. Hey, Fannie and Freddie used to be considered the safest of the safe for investing your money. Now their stocks go for less than $1.

Unlike other businesses, financial institutions do enormous amounts of trades and agreements with each other. That’s what has people scared. The counter-party risk. If Lehman goes down, those trades no longer have anything backing them on the Lehman side. I believe that Merrill, who is also wobbling badly, has $4 trillion in such trades. Yes, trillion.

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