Alan Greenspan: “Other Major U.S. finance firms may fail”

September 14, 2008 by · Leave a Comment
Filed under: Bank Failure, Economic News 

Well it is nice to hear Greenspan talk some reason and not jump on the bailout wagon. Companies failing in a free-market economy is a normal occurrence and actually “shows” the market working. If you make bad decisions then you should face the consequences no matter how big you are. I am not advocating if you provide some other useful service that we should let that run to the wayside (ie: Fixed rate mortgages via the GSE’s). Hopefully Paulson is finally ready to let the tide out.

Article:

Former U.S. Federal Reserve Chairman Alan Greenspan on Sunday said he suspected “we will see other major financial firms fail,” but said it did not need to be a problem. It depends on how it is handled and how the liquidations take place,” Greenspan said on the ABC program, “This Week.” “And indeed we shouldn’t try to protect every single institution. The ordinary course of financial change has winners and losers.”

Greenspan also said it was a very bad idea to get rid of short selling even though stock in major financial institutions such as Lehman Brothers and American International Group have been beaten down in recent days.

Source: Reuters

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