Posted by The Happy Tutor
Now: Greenspan disavows responsibility for subprime mortgage mess.
Then: Adjustable Rate Mortgage:
In a speech to a credit union group, Fed Chairman Alan Greenspan questioned whether fixed-rate mortgages were the most cost-effective means of financing a home purchase. He said "American homeowners clearly like the certainty of fixed mortgage payments" but pay several thousands of dollars a year for the benefits. Greenspan said homeowners "might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade. Greenspan noted that if homeowners are "willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." Feb. 24, 2004.
Even then eyebrows were raised. Joseph Stigletz explains the hows and whys of the Greenspan bubble. Among the winners is Ambassador Arnall who went from flogging subprime mortgages to Ambassador to the Netherlands following campaign contributions to George Bush. Caveat Emptor, my fellow citizens. Wealth Bondage is on plan.