On the about-face of Greenspan...

It's almost painful to see the unraveling of the mystique of Alan Greenspan, having been kept under wrap for so long, the guy with the midas touch, who was credited with the economic expansion, the stock market rise, and the soft landing since the tech bubble burst in 2000. For the general populace, it's better to maintain the facade, knowing that perhaps someone really does know most everything, and have the capability to deliver salvation, in the face of disaster. Such was the collapse of credibility of Greenspan, and to a less extent, Robert Rubin.

The reckoning was long overdue, now that we know how vehemently these two men had fought against any attempt to regulate derivatives that are at the heart of the current credit market woes. Now we also know that the free market has systematically failed to regulate itself (against what Greenspan had long maintained would be far more effective than government regulation), when risks can all be packaged and passed along to the next guy like hot potatoes.

For Greenspan to consistently maintaining the current events as a once-in-a-century tsunami-like event, that there's no way to avoid it from happening, is just plain BS. While government regulations could have muffled market innovations, they would also have reduced the blunt impact of catastrophic events, should the market fail to operate according to theory.

If only Greenspan and Rubin had allowed even better mandatory disclosure of derivatives to provide some form of transparency, we would not have been in deep shit like we are now, when no one practically knows where the most toxic elements are. Perhaps then, Hank Paulson, the current Treasury Secretary and the fall guy holding the bag, who tries to devise some bailout plan, would have been in a better position to do something more effectively, rather than limping from crisis to crisis. As it is now, Paulson is but one impotent demigod who is losing his confidence game fast.

Last year, when things started getting worse from mid 2007, people were saying, things will get better by end 2008. From the look of it now, and how the subprime, then the credit market have been pulling down not just the housing, but the general economy as a whole, it looks increasingly like that it'll be at least another year, till end of 2009 that things will look any better, before it gets worse.

There are buying opportunities, although it's sad that our business venture in watches will probably have to wait till economy picks up again before it takes off. You win some, you lose some.