Greenspan Faces Congress

... Greenspan said, he and others are in "a state of shocked disbelief" that "counterparty surveillance" failed. He said he still doesn't fully understand what went wrong.

You won't hear many statements nearly as asinine as that one folks. The great Alan Greenspan doesn't know what went wrong on Wall Street. Give me a F'ing break. You and your moron friends decided to let an industry that makes money based off of commisions and fees taken from playing with other people's money run wild without anyone looking to see what they are up to.

"We have learned that voluntary regulation does not work," said Christopher Cox, chairman of the Securities and Exchange Commission

Now we know, if you hand a bunch of greedy people the keys to the money bin and tell them your leaving and as long as they pinky-promise not to take any money they might end up taking the money and running with it, who knew?

The financial system exists to raise and direct the capital the economy needs to grow and "should not be an end in itself - a baroque cathedral of complexity dedicated to limitless compensation for itself in the short-term, paid for with long-term risk capable of threatening the entire nation's sustenance and growth," Cox said

When I first got into this industry I was shocked to find out how money was being freely invested. Investment companies investing in other investment companies, all in a big circle and liking the fat returns they were getting because the valuations were skyrocketing.

The problem was, and probably still is, that the investments were backed up by nothing. They all invested in each other, which caused the valuations to rise due to the supply/demand concept, but without the revenue to back up the valuations it's all just a house of cards.

Greenspan said he favored strengthening the regulatory structure. "As much as I would prefer it otherwise, in this financial environment I see no choice but to require that all securitizers retain a meaningful part of the securities they issue," Greenspan said.

Amazing! Even with the economy in the tank and Wall Street a mess he still wishes there was no regulation, but will grudgeningly accept it. Absolutly shameless.

If you choose to invest, make sure you're actually investing in something that has real value, not paper value. And buying into a company that makes all their money by buying into companies that buy into companies that buy into companies that buy into companies that buy into compies.... and on and on.... is a bad idea.

Check out CNBC for the full article.