Recent Business
In recent business news, much attention has been devoted to public pronouncements by Alan Greenspan, former and long-time chairman of the United States Federal Reserve, on the causes of the global economic recession that has been inhibiting financial activity and growth since 2008 and the best course to be taken for future economic safeguards. In the past, during Greenspan’s long, respected tenure heading the Fed, which lasted from 1987 to 2006, any public statement made by the highly reputable financial “Maestro” would reliably be pounced on by media outlets as a major item of breaking business news. Though Greenspan has since been replaced in thus function by Ben Bernanke, his words still carry great weight in the national media, and he has regained, albeit briefly, his place in breaking business news by releasing details of the argument made in a paper presented to the Brookings Institute on March 19 which address the perceived role that his leadership of the Fed played in paving the way for the severe economic recession.
An important item in recent business news closely related to the overall weakening of general economic activity was the bursting of the financial bubble that had emerged in the housing market. Greenspan’s paper became breaking business news at the time of its release in part by directly addressing the role that his decisions as chairman of the Fed played in inflating this dangerous uncontrollable bubble. By releasing items of his argument, Greenspan has sought to publicize an argument on his behalf that the cause of the bubble does not lie in his high-profile decision in the early 2000s to lower the federal funds rate, but rather in more long-term trends in interest rates separate from the immediate decisions made by the primary banks. Rather than this financial decision, Greenspan has placed the primary blame for the unsustainable growth in the housing market to the recent business news trend for Asian economies to grow rapidly in comparison to their Western counterparts in the post-Cold War world. In his view, this phenomenon was a driving force for the lack of liquidity experienced by other sectors of the international economy.
Nonetheless, Greenspan did register some criticisms of the business decisions that in his view had contributed to the recession. Breaking business news on the specifics of his statement have focused on some of the culprits he singled out for criticism. He pointed to the recession’s recent business news revelation that major financial firms relied for their judgments on mortgage-backed securities, many of which were proved only by breaking business news to be essentially worthless, on the opinions of ratings agencies and risk assessors within their own companies that were swayed by incentives to improperly judge these financial tools as safe. Speaking to a larger issue, Greenspan opined that risk analysts in the last few decades had been too dismissive of the risk for major financial problems. Recent business news will be preoccupied for some time with evaluating and answering Greenspan’s public statement.