Thursday, September 13, 2007

Greenspan concedes mortgage dilemma - Yahoo! News

Greenspan concedes mortgage dilemma - Yahoo! News:
"Some blamed Greenspan's interest rate policies for feeding the housing frenzy. Sales had hit record highs and house prices galloped from 2001 to 2005. Then the market fell into a deep slump. The Greenspan Fed from early 2001 to the summer of 2003 had slashed interest rates to their lowest level in decades.

It was done to rescue the economy from the blows of the bursting of the stock market bubble, the 2001 recession, the terror attacks and a wave of accounting scandals that shook Wall Street. Critics say the Fed kept rates too low level for too long, encouraging a Wild West mentality in housing.

Greenspan, however, defended the institution's actions. 'They are mistaken,' he said of the critics. 'It was our job to unfreeze the American banking system if we wanted the economy to function. This required that we keep rates modestly low,' he said."

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