Why all the blame on Greenspan?

I don’t know finance that much, but I can’t see why putting all the blame on Greenspan for the credit crunch problem and its subsequent aftermath.

In a common sense nut shell, I view the financial tsunami was caused by the followings:

• Mr. Greenspan's neglect on the regulatory issue on subprime lending -- Fed's responsibility on supervising banks and enforcing and interpreting consumer-protection laws such as the Home Ownership and Equity Protection Act. (source: His Legacy Tarnished, Greenspan Goes on Defensive)
• Prolonged low mortgage interest rate, correlated with the low Fed rate from 03-05.
  
• Risky and excessive Subprime lending(Subprime lending institution policies)
• The global demand of the asset ( or subprime mortgage secularization) secularization, a financial engineered product with high risk.
• Mistakes on speculation( or a failure of risk adjusted calculations) of the mortgage backed securities. (world wide phenomenon, HSBC, a very conservative bank, acquired Household, eg. )
• I Bank incentive structure (High returns on high risk moves, No/minimal loss on negative return—extreme case of the problem of Principle/Agency problem.)
• Holes in the regulated securities market worldwide and were exploited.

What Greenspan responsible were the Fed rate (which also correlates to the mortgage rate for US housing) and the overseeing the US mortgage policy, they might constitute necessary conditions for the consequence, but they were not enough to be sufficient conditions.

Also, the way he controlled the Fed rate was, in part, maneuvers to achieve the most prosperous era for the US economy from nineties and also to let US economy survived after the internet bubbles and 9-11.

Two important points to be noted:

The financial engineered products outpaced regulations.

The tension between regulated and deregulated market ideology.

But Greenspan, an easy scapegoat?

A failed police, maybe...

In all of bullet points above, almost all of it are centralized into one thing, one innate nature of human – greed.

An on the other hand, the regulation on this human nature.

It is too convenient to put the blame on a figure head (or the police). Like if Greenspan was not in position. Everything would go nicely. Every holes can be caught.

By this, I am reminded by the exchange of open letters between Joseph Brodsky and Vaclav Havel.

Let me rewrite a paragraph from the letter by Brodsky to Havel,

‘It is here, dear friend, that I think your blame on Greenspan fails you. For neither the Fed rate nor its correlated US mortgage rate amounts to an sufficient cause of the credit crunch, since the blame on Greenspan would helped, helps, and will for quite some time help the finance world to externalize evil. And not the finance world only. To quite a few of us who also share this nature--greed, and especially those who profited from it, the presence of the blame on Greenspan was a source of considerable moral comfort. For one who points and find out the cause of the financial crisis almost automatically perceives oneself as not responsible and skips self-analysis. So perhaps it's time—for us and for the world at large, works in finance or not—to scrub the term fed rate from sufficient conditions of the crisis, so one can recognize that the lesson for what it was and is: collective responsibility.'

Let Greenspan be responsible what he is responsible and so do we.

The original piece,

‘It is here, Mr. President, that I think your metaphor fails you. For neither the Communist nor the post-Communist nightmare amounts to an inconvenience, since it helped, helps, and will for quite some time help the democratic world to externalize evil. And not the democratic world only. To quite a few of us who lived in that nightmare, and especially those who fought it, its presence was a source of considerable moral comfort. For one who fights or resists evil almost automatically perceives oneself as good and skips self-analysis. So perhaps it's time—for us and for the world at large, democratic or not—to scrub the term communism from the human reality of Eastern Europe so one can recognize that reality for what it was and is: a mirror。’—by Joseph Brodsky

By the way, I am very interested to know what would Milton Friedman say if he is alive today.

Either way, I think his answer would be pretty grim.

沉重的肉身

劉小楓

The fall into the abyss of deconstruction inspires us with as much pleasure as fear. We are intoxicated with the prospect of never hitting bottom.

Gayatri Chakravorty Spivak

Where flowers bloom so does hope.

Lady Bird Johnson

Darkness is made immortal by the touch of light.

Jay Gallagher

In the depth of winter, I finally learned that within me there lay an invincible summer.

Albert Camus

I feel there is something unexplored about woman that only a woman can explore.

Georgia O'Keeffe

All that we are is the result of what we have thought. If a man speaks or acts with an evil thought, pain follows him.

If a man speaks or acts with a pure thought, happiness follows him, like a shadow that never leaves him.

-- Gautama Siddharta

The longest journey is the journey inwards. Of him who has chosen his destiny, Who has started upon his quest for the source of his being.

Dag Hammarskjold

At the touch of love everyone becomes a poet.

Plato .

(A close up shot of Jewish Bride in the Rijksmuseum Amsterdam.)

Hope is nature's veil for hiding truth's nakedness.

Alfred Nobel

Somewhere we know that without silence words lose their meaning,that without listening speaking no longer heals,that without distance closeness cannot

-- cure.

Henri Nouwen

A Prayer in Spring

(My second painting)

Oh, give us pleasure in the flowers to-day;
And give us not to think so far away
As the uncertain harvest; keep us here
All simply in the springing of the year.

Oh, give us pleasure in the orchard white,
Like nothing else by day, like ghosts by night;
And make us happy in the happy bees,
The swarm dilating round the perfect trees.

And make us happy in the darting bird
That suddenly above the bees is heard,
The meteor that thrusts in with needle bill,
And off a blossom in mid air stands still.

For this is love and nothing else is love,
The which it is reserved for God above
To sanctify to what far ends He will,
But which it only needs that we fulfil.

Robert Frost

The inner reality of love can be recognized only by love.

--Hans Urs von Balthasar

黑夜一无所有, 为何给我安慰

-- 海子

Because I remember, I despair. Because I remember, I have the duty to reject despair.

---Elie Weisel

Distance is the soul of beauty.

-- Simone Weil

It is not the brains that matter most, but that which guides them — the character, the heart, generous qualities, progressive ideas.

— Fyodor Dostoevsky

I know but one freedom, and that is the freedom of the mind.

--- Antoine de Saint-Exupery

I often think that the night is more alive and more richly colored than the day.

--- from Vincent Van Gogh

Responses follow

When the hearts speaks, the mind finds it indecent to object

-- from Milan Kundera, The Unbearable Lightness of Being

It is not about the bike.

-- from Lance Armstrong

Recently, I got the Nikon D40 Camera, with Kit
lens and also a 55-200mm VR lens.
Dirt cheap. Love it to death.

This photo was taken by it. Again, it conveys
me a sense of serenity. This scene can be captured
nicely with ANY camera.

Chasing after new models is in vain.
But I am too lazy to go back to my FM2.

Life is beautiful, so is dance.

photo by Lois Greenfield.




















Pina Bausch, Cafe Muller


















Pina Bausch, Cafe Muller





Pina Bausch, Vollmond

A Response

These pictures are my response to a tree picture I saw on another blog.
The color is stunning.

I really enjoy taking pictures of trees. Do not know why.
Especially in dark nights.

Parting with sorrow before it is ripe is as painful as the sorrow itself.

Jay Gallagher

Just like, appointing Osama Bin Laden to fight the War on Terror? (by the US government)

Finally found it!

I took this picture in University of Vienna in 02.


It was a picture of a picture posted on the student board.

The writing is not readable on the Post It-s.
Let me post them here.(or you may click for a larger images)

From upper left, clockwise,

Sigmund Freud, Pope John Paul II, Marie Curie, Cicero, Paracelsus, Martin Luther, Goethe, Karl Marx.

Commentary:

Sigmund Freud looks like Marx.

We have females as Pope and Luther!! And in red.

Two Curies' hair style match!

2 Polish, 2 Austrian, 1 Roman, 3 German.

Where is your Post It?

But, hey, where is Amadeus?

Serenity

This is my friend, Malaika. Also, it is one of my most favorite portrait.

It draws me into deep thought. I do find peace just by staring at it.

My beloved.

Made a mistake. My MOST favorite painting is the above. My sixth one.

I painted this in the darkest state of mind in my life in Jan 08.

I remember that I squeezed paints directly on the canvas
and just stroke the brush from left and right.

I finished it within 15mins .

In the dark night, the grey engulfed all matter and possibility.
Meanwhile, the red was growing warmly with a genuine hope.

Sadly, another piece of my favorites was shredded by me.

And it is heartbreaking.

Real Presence

Real Presence in religious terminology means in the Eucharist, Christ is really presence in the bread and wine.

It is also a title of a book by George Steiner.

I hope it is not being blasphemy, but the first thing that came into my mind for the title of my picture was Real Presence.

'Can there be major dimensions of a poem, a painting, a
musical composition created in the absence of God? Or,
is God always a real presence in the arts? Steiner
passionately argues that a transcendent reality grounds
all genuine art and human communication.' from the book's synopsis.

The Trout, The Hedgehog and The Fox

When I watched the Trout performed by these gods and the goddess, I suddenly was reminded of the concept of The Hedgehog and The Fox.

To put it in a more fashionable terms, it is the 10000 hour rule hedgehog.

When I look back on myself, I always want to be a fox. Trying to know as many thing as possible superficially without in depth understanding.

I understand by doing this, I would never be successful in anything and more importantly, be able to achieve the state of flow, an important source of happiness.

And also, it will come easily to desensitization.

But, life is too short to be a hedgehog for me.
And I could not live twice.

So be it. Let this self constructed and deceptive excuse roots in me for a longer time.

But, deep down in heart, like many other, I am a fox who wants to be hedgehog.

ps: only immortals can be both a hedgehog and a fox at the same time..

In Heaven as on Earth.

This is my most favorite painting. I remember I painted this in less than half an hour. My fifth one.

Everyone needs hope, but everyone is stuck in reality.

Rather than on Earth as in Heaven, I just tried to fuse Heaven with Earth.

I think it is a metaphysical painting. (metaphysics in philosophy sense. ) However, there is no such genre.

Ironically, in an occasion, I cut this painting into pieces with a knife.

Life can never be undone.