Timeline
1995-2000: DotCom Bubble
March 2000: Bubble reaches peak and bursts
2001: Fed lowers Funds Rate, 6.5% to 1.75%
2002: Annual home price appreciation of 10%
2003: Mae and Mac buy $81 Billion in Subprime Securities Greenspan lowers interest rates to 1%
2003-2007: Deregulation:risky business, lenders
securitize and repackage subprime loans
2004: US homeownership peaks: 69%
2005: 4th Quarter of 05 to 1st Quarter of 06, Median
Prices Nationwide dropped 3.3%
2006: Prices flat, home sales fall
2007: Subprime mortgage financial crisis: 25+
Subprime lenders declare bankruptcy
March 2000: Bubble reaches peak and bursts
2001: Fed lowers Funds Rate, 6.5% to 1.75%
2002: Annual home price appreciation of 10%
2003: Mae and Mac buy $81 Billion in Subprime Securities Greenspan lowers interest rates to 1%
2003-2007: Deregulation:risky business, lenders
securitize and repackage subprime loans
2004: US homeownership peaks: 69%
2005: 4th Quarter of 05 to 1st Quarter of 06, Median
Prices Nationwide dropped 3.3%
2006: Prices flat, home sales fall
2007: Subprime mortgage financial crisis: 25+
Subprime lenders declare bankruptcy
About Greenspan
Alan Greenspan is an economist who served as Chairman of the Federal Reserve Board from 1987-2006. He was first appointed by President Ronald Reagan in 1987 and reappointed at four-year intervals until retiring in 2006, ending the second longest tenure in history. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC.
DotCom Bubble
The 90's saw a dramatic increase in the use of computers and the subsequent creation of numerous website-based companies. Many of these websites are still up and running today but some of them were bought out or forced to remove themselves from the web.
Recovery Plan
Due to the burst of the DotCom bubble, a recovery plan was put into action. This included, lowering the federal funds rate, the introduction of exotic home loans and an era of deregulation.
Criticism
As with any plan for recovery, there are always more than one idea or suggestion. Because of this reality, there were criticisms of Alan Greenspan and some of the policies he implemented on the path to recovery.