Greenspan is a core element of this catastrophy

Ironic is that Greenspan, in defense for his deregulations of derivatives, said they helped to spread the risk - as it turns out that's right on the spot - like a disease they contaminated the global financial system. Furthermore, he allowed banks to leverage so aggressively (stupidly) their balance sheets, which is the other component of this deadly cocktail. This is by any means much more harmful than any terrorist could have done to the USA or actually the whole western world.

That's why these Senate and Congressional hearings should stop making these cozy hearings. They call it "grilling" but let's see how they treat prospective terrorists in Guantanamo and how they deal with people who evidently have destroyed the value of regular people working hard for centuries and getting their life achievements wiped out . There is an obvious mismatch of effort, evidence and damage.

This basic dysfunction of democracies will drive people to stand up against their corrupt governments soon. After 9/11 governments were eager to strip down human rights close to zero in order to catch terrorists but, at the same time, they deregulated bank rules and eased the oversight so they could ride the whole world into a depression. The annoying part is it was foreseeable. Besides Roubini and some other insightful guys, even a friend of mine and I forecasted this development 2 years ago. I had some help from astrology and common sense but I think it was foreseeable and this all could have been trimmed down at least by even Mr. Bernanke who has a Ph.D. in the Great Depression yet he did nothing until it was too late and that was even too little and too hesitant.


Excerpt:
http://www.cnbc.com/id/27333566

Critics charge that he left interest rates too low in the early part of this decade, spurring an unsustainable housing boom, while also refusing to exercise the Fed's powers to impose greater regulations on the issuance of new types of mortgages, including subprime loans.

It was the collapse of these mortgages and rising defaults a year ago that triggered the current crisis.

J. Scott Applewhite / AP Alan Greenspan on his last day as chairman of the Board of Governors of the Federal Reserve System.

Greenspan, true to his Republican free-market principles, successfully opposed attempts to impose tighter controls on complex financial contracts known as derivatives, which are largely unregulated and which some see as a contributing factor in the current problems.

Greenspan recently described the current episode as the type of wrenching financial crisis that comes along only once in a century.

He has defended the use of derivatives, so-named because their value is derived from the value of an underlying asset.

He said they were useful in helping to spread risks.