Alan Greenspan To Join Hedge Fund (Not Good)

Hedge fund manager John Paulson, who earned billions of dollars last year by betting against the housing market, said on Tuesday that former Federal Reserve board chairman Alan Greenspan will advise his firm.

Greenspan, whose words can still move financial markets, will advise Paulson on the global economy for an undisclosed amount of money, the hedge fund said in a statement.

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Was it not Alan Greenspans job to prevent what we are going through now? Does this news make anyone else mad?

This is not small time at all:

On Wall Street, the losers in the collapse of the housing market are legion. The biggest winner looks to be John Paulson, a little-known hedge fund manager who smelled trouble two years ago.

Funds he runs were up $15 billion in 2007 on a spectacularly successful bet against the housing market. Mr. Paulson has reaped an estimated $3 billion to $4 billion for himself -- believed to be the largest one-year payday in Wall Street history.

This Article Will Explain Everything

I am amazed more people are not talking about this. I hope people do read this and really sit back and think.

Related Articles:
Financial Times
AFP
Telegraph

So news article over, did the hedge fund have a little inside information from Alan Greenspan? There has to be some conspiracy content in here.

Even if there was no prior knowledge / assistance, how much money can Greenspan make with his current "influence"?

One Paris trader said Citigroup's results plus Greenspan's comments to the Wall Street Journal had created panic in the market.

Cha-Ching

Very prescient OP!

So let me get this straight... A former FED chair, famous for a "hands-off" approach to regulation, largely hailed as being a root cause of this mess, is now calling for the nationalization of Banks - while working for a company who made tons of money shorting bank stocks!!??

You just can't make this stuff up.

www.ft.com...

The US government may have to nationalise some banks on a temporary basis to fix the financial system and restore the flow of credit, Alan Greenspan, the former Federal Reserve chairman, has told the Financial Times.
In an interview, Mr Greenspan, who for decades was regarded as the high priest of laisser-faire capitalism, said nationalisation could be the least bad option left for policymakers.
”It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”

www.dollarsandsense.org...

www.dailykos.com...

What bugs me most is that no one really even blinks an eye at this sort of inbred corporate cannibalism and overt hypocrisy. Greenspan essentially tossed out his own ideals - if he ever had any - for money.

People are starting to catch on. I think this guy should be charged with something, what - I don't know...

www.nypost.com...

Alan Greenspan showed incredible chutzpah when, just a week after resigning as chairman of the Federal Reserve, he promptly began to cash in on his fame by "earning" $250,000 from Lehman Bros. to meet with the firm's biggest clients.

Not bad for a night's work.

Lehman isn't around anymore - it was blown up by the subprime crisis. But Greenspan is, in a big way - working his magic in the private sector by advising firms on how to make money in these troubled markets.
Earlier this year, high-flying hedge fund Paulson & Co. retained him for its "advisory board." The firm is a noted "short seller" of banks and financial stocks - meaning it makes money when these companies' shares fall.
The thing is, Greenspan is making public comments that inevitably influence public policy and the markets - and some of those comments may well have led to his clients making a nice profit.

In a recent speech to the Economic Club of New York, Greenspan said the recession would likely "be the longest and deepest" since the Great Depression and that Congress might have to allocate more money to save the beleaguered banking system (on top of the billions already gone for the Troubled Asset Recovery Program).

Then he told the Financial Times: "It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring" of their troubled balance sheets.

Such a move would wipe out stockholders, sending shares of banks even lower - thus likely benefiting Paulson. It would also protect bondholders - helping another Greenspan client, the large bond-firm Pimco.

Let's be clear here: Alan Greenspan is free to earn a living, particularly after earning government wages during his nearly 20 years as Fed chairman. He's also a smart man with valuable insights into the banking crisis (the Fed is the banking system's primary regulator).

But Greenspan's comments helped torch already beaten-down financial shares, which presumably led to his clients making money. Citigroup yesterday fell 13.75 percent to its lowest close since 1991, finishing at $2.51 a share. Bank of America fell 14 percent to close at $3.93 a share.