Today, former Federal Reserve Chairman Alan Greenspan told the House Committee on Oversight and Reform that our economy is in "in the midst of a once-in-a century credit tsunami."

We couldn't agree more, and have been warning since December 2007, that our economy is crisis and heading for serious trouble.

Unfortunately, the impact of this credit tsunami is not much better than when the tsunami hit the Pacific and Indian oceans in 2004. Businesses will be wiped out, and we must expect there will be serious losses, across the board.

Coming out of this crisis, Greenspan predicted "a far sounder financial system." He conjectured that any regulatory changes being perceived now "will pale in comparison to the change already evident in today's markets."

Former Secretary of the Treasury John Snow said "what we have witnessed is a breathtaking breakdown in traditional risk management activities in the financial sector, from lax lending practices--including the now infamous "liar loans"--to the spread of highly complex and opaque financial products the risks of which weren’t properly evaluated by issuers, investors, or rating agencies, all of which combined to create immense risks the scale of which wasn’t readily apparent to anyone."

Both agreed that great changes are necessary, and Mr. Snow said we need a financial services agency, capable of understanding the complexities and intricacies of the financial markets, consolidating the knowledge of the individual agencies and commissions currently responsible into one entity with greater understanding and controls.

Presently, stocks are trading in a 7% range, and the credit markets are continuing to show signs of risk aversion. Bankers simply don't know how to make a safe loan anymore, simply because the value of collateral is in question.

The "Main Street" effect of this crisis is going to be global and very long in duration. We can foresee long-term employment problems and issues of personal credit for Americans and Europeans.

On a side note, it is important here to point out that while we are now in an official recession, we are also in a depression and that the two can be concurrent. While some believe that economic depression is an elevated grade of recession, this is a false premise. Depression reflects the general state of mind and confidence in the market, and the impact on the economy, generally, where recession reflects a general retrenchment of commercial operations.

To clarify, if companies are not doing well in the economy due to a variety of circumstances, producing less products, with high unemployment, the economy can be defined as in recession. If the economy is in an overall crisis, where confidence in the markets, business, banking and future growth is eroded, with problems in liquidity, credit and high business failure rates, the economy is also in a depressed state, hence, it is possible to have both recession and depression simultaneously.

We at the Institute continue to believe that validation of future loan processing will help restore confidence and begin to seriously ease the tight credit markets.

Some are suggesting that Messrs. Greenspan and Snow have culpability in this crisis and want to blame them. Unfortunately, that old blame game is pointless. Mr. Greenspan made an admission of mistakes, but his role is nothing in comparison to that of the bankers who processed bad loans, nor of the public that borrowed beyond their means. If we try to affix blame or criminal charges, the entire nation should be in jail - in effect, the depression is our imprisonment as we will all have to live within its sentencing guidelines.