via press release:
Alan Greenspan, the former chairman of the Federal Reserve, admits he missed some of the signals that led to the economic downturn of 2008, in an interview with Anthony Mason for CBS SUNDAY MORNING WITH CHARLES OSGOOD to be broadcast Oct. 20, 2013 (9: 00 AM, ET) on the CBS Television Network.
When Greenspan left the Federal Reserve in 2007, his reputation was stellar. However, a few years later some experts began to blame him for what happened in 2008 when the housing bubble burst, Lehman Brothers collapsed and the stock market plunged.
“It’s like a mystery story to me,” Greenspan tells Mason. “You know, how in the world did I miss it? I mean, I was supposed to know, and I probably did know as much as anybody in the U.S. government - I didn’t get it. And I said, ‘I’m going to find out why.’”
Greenspan tells Mason he spent two years digging into that mystery and writing his new book, The Map & The Territory. “It became very apparent to me that we misunderstand how systematic fear is,” Greenspan says.
What he found in his post-mortem of the decline was that fear led to panic selling and the emotions that inflated the housing bubble were not factored into the Federal Reserve’s sophisticated computer models.
“I was wrong,” Greenspan says. “In fact, you can measure it. Because if you look at the business cycle, for example, euphoria drives it about like this and then fear collapses it. And you can take one example after another and they look alike.”
In a wide-ranging interview, Greenspan talks about his career, his time playing music with Stan Getz as a teenager, and his thoughts about Federal Reserve Chairman nominee Janet Yellen.
Greenspan said Yellen is an “intelligent woman.”
“I’m glad to see her as the first woman chair of the Fed,” Greenspan says. “It’s long overdue.”
CBS SUNDAY MORNING is broadcast Sundays (9:00-10:30 AM, ET) on the CBS Television Network. Rand Morrison is the executive producer.