Greenspan

The Securities and Exchange Commission is finally approving rules requiring all but the smallest hedge funds to register with the S.E.C. and make their records available for examination.
Hedge funds are a bunch of assets pooled together that are usually open only to wealthy investors. They are essentially unregulated.
Alan Greenspan, chairman of the Federal Reserve, in a typical move outside of his strictly determined duties loudly complained to Congress that the registration of hedge funds could lead to more regulations and reduce liquidity in the financial markets. He said this without providing any facts or meaningful historical financial context outside of his increasingly bizarre personal anecdotes.
In 1998 he had this to say about regulating hedge funds : “So that the question, basically, is can we improve the system? I'm not sure I know at this stage how in this particular instance, other than making certain that the technical capabilities of the banks who lend money to these sophisticated organizations, are up to the ability of knowing when they're putting monies at risk.”
“The hedge funds, as far as I can see, cannot be regulated directly in this country. Two things will happen: either you regulate them and they will disappear because the nature of their business, they would perceive, cannot be effective if it's regulated, or far more likely, they will move to a different venue and trade, because they don't need the United States particularly. Now, starting with the premise that we can't do anything, the question really then gets to what do we do in lieu of that to protect the American financial system, which is what it's all about. And in my judgment, the most effective, indeed, really the only significant, effective means that we have to make certain that they, that group of hedge funds, does not create a problem is by making certain that the banks and others who lend them money have direct supervision themselves, as they do, and due diligence to make certain that when they lend money, they're doing it most sensibly.”
Even 6 years ago he sounded confused. He has, as each year passed, gone further and further afield from the narrow duties imposed on his office. He has wandered now into areas that he admittedly does not know how to deal with, and which are legally beyond his right to control or even comment upon and yet he dresses up and preaches in front of the Congress any time he gets the chance.
Now, in 2004, as the Bush Administration eggs him on, he has been paraded out for the entertainment of the Senate Banking Committee. He talked about Hedge Funds, the Securities and Exchange Commission, fraud, the entire U.S. financial system, regulatory proposals and predicted huge losses to the Hedge Fund industry.
Presumably his predictions were derived from some visions and voices that he has not seen fit to share with the Senate Banking Committee.,
In the end, the chairman of the SEC, Mr. Donaldson, stated : "I don't get much push back from people who are operating good funds. I don't get much push back from people who have nothing to hide."
Meanwhile, Mr. Greenspan and Mr. Bush keep on pushing and pushing and pushing…