Another day, another hearing on what went wrong…

October 23, 2008

Yesterday was the credit rating agencies. Today’s turn before the Committee on Oversight is the troika of Former Fed Chairman Alan Greenspan, former Treasury Secretary John Snow, and current SEC chairman Chris Cox. The opening statements, including a substantially shorter one by Cox than the one sent out to reporters only an hour earlier. Cox’s initial statement stretched on for 12 pages, but the one he read a short time ago came in at under five minutes. One thing that’s clear from the opening statements was the patchwork of regulatory authority meant that nobody was really watching the store. Both Cox and Snow talked about “turf battles” and “a fractured regulatory system” respectively with Snow adding about the need for a “360-degree” view.

Still, as with earnings conference calls, the scripted opening statements aren’t all that exciting. It’s the questions that count. Chairman Henry Waxman is questioning Greenspan now and one of his first questions — to Greenspan — was where he made a mistake. Greenspan’s response was that he thought the “self-interest of organizations — our banks and such — were capable of protecting their shareholders and themselves.”

I’ll be providing additional updates as the hearing progresses.

UPDATE 11:12 am: The hearing just took a sharp right turn with Rep. John Mica trying to blame Barack Obama for the financial crisis by saying that Obama was the “largest recipient in 20 years” of money from Fannie and Freddie’s PACs. Mica promised to enter something into the record that he called “Follow the Money Trail”. Mica also said that hearings were being delayed until after the election — he even held up a sign with the date that said Nov. 20. “This is a nice dog and pony show,” he added. The statement starts at around 52 minutes in.

UPDATE 11:50: Dennis Kucinich just asked Greenspan when he first realized that there was a housing crisis. “Sometime early 2006 in retrospect. I did not forecast a significant decline because we had never had a significant decline like this before.”

UPDATE 3 pm: Well, I obviously fell off the trail of live blogging. To be honest, once it started devolving into a spat over whether it was the Republicans or Democrats that were at fault, it became a bit tiresome. But here’s a few links from reporters who stuck it out:
WSJ
Bloomberg
BBC

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