After my write-up of Alan Greenspan's speech at the end of last year, where he says the subprime crisis was unavoidable,
I was reminded of one of my old presentations with a quote from Alan
Greenspan, when he was head of the Fed back in October 2004:
"In
recent years, banks and thrifts have been experiencing low delinquency
rates on home mortgage and credit card debt, a situation suggesting
that the vast majority of households are managing their debt well. Yet
many analysts focusing on broader macroeconomic conditions are far less
sanguine in their assessments. They have been disturbed particularly by
the rising ratio of household debt to income and the precipitous
decline in the household saving rate ...
"... although some
broader macroeconomic measures of household debt quality do not paint
as favorable a picture as do the data on loan delinquencies at
commercial banks and thrifts, household finances appears to be in
reasonably good shape ...
"... if lenders, including community
bankers, continue their prudent lending practices, household financial
conditions should be all the more likely to weather future challenges."
Read the whole speech here,
where he tries to fudge and hedge it all with if's and but's. And yes,
I know it's mean to catch out old speeches, but to say it's nothing to
do with you Alan and it was unavoidable is a bit rich, isn't it?
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
