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Alan Greenspan Discusses The Fed's Inability To See Bubbles, Is Confident There Is A "Bubble Waiting To Burst In China"
The maestro managed to run away from the old folks' bent on monetary destruction home just long enough to carry this amusing interview with Bloomberg TV's Al Hunt. Tomes (will) have been written about Greenspan's dementia, just as books will be available on the Kindle one day analyzing his successor's massive mistakes which are slowly but surely leading to an American day of reckoning, so we won't comment much, suffice to point out some of the key highlights in Greenspan's presentation. Most amusingly, note the escalating battle between Greenie and the Fed's new vice-chairman Janet Yellen, who blatantly contradicted Greenspan's that higher interest rates would have prevented a housing bubble. For all it's worth, Alan's response is actually quite interesting: "We tried to do that in 2004. We ran into a conundrum. For decades, every time the Fed raised its short-term rates, the 10-year note, which is really the proxy for mortgage rates, the yield went up with it. This time, it did not. And the reason it did not, is you cannot have the 10-year note determined both by arbitraged global finance and individual central banks. As a consequence of that…starting in the period where the sensitivity of the early stages of the bubble were building up, it was very clear that what was determining the rise in prices was movements in long-term mortgage rates going down, not the federal funds rate." In English, this is quite intriguing: China, which at about this time started running up massive trade balances, essentially became indifferent about US monetary policy, as it gobbled up everything east of 5 Years, with a preference on the 10 Year. The reason for this is the US consumer became the one driving force behind the massive Chinese economic expansion. With the consumer out, and with China set to report its first trade deficit in 6 years, and the Fed pulling out its support of mortgages, and the Chinese National Bank pulling liquidity, the move in 10 Year over the next few weeks is now more critical than ever, which is why the 10 Year - 30 Year MBS spread is paradoxically pressured at an all time tight spread, as all the early MBS shorts are covered, forcing pundits to say MBS are cheap as fighting momentum in this market is professional suicide. To be sure, this technical push down will soon end. And when this last coiled spring blows out, watch out below, first in housing, then in rates, in corporates, and last, in equities.
Key highlights from the interview.
On the outlook for the economy:
“Ordinarily, we think of the economy affecting stock prices. I think we miss a very crucial connection here in that this whole recovery, as best as I can judge, is to a very large extent, the consequence of the market's bottoming last March and coming all the way back. You can see the whole blossoming of finance. Remember, it is the market value of equity in a financial institution that determines the ratings of its debt. It’s not the book value. As the stock prices have gone up, debt became far more valuable and you can see this huge issuance especially of junk bonds. It is affecting the whole structure of the economy, as well as creating the usual wealth effect impact.”
On the jobless rate at the end of 2010:
“I think the jobless rate will be ending up not far from where it is, because even though the economy is going to continue to rise, provided I might add that the stock market moves ahead of it, but if that happens, you’re going to get a significant rise in employment as we move into the year, but we will also get a rise in the labor force.”
“The rate will come down a bit. Those who are looking for sharp declines will be disappointed.”
On rising yields for treasury auctions:
“It is a canary in the mine at this stage. The way I would look at it, if the markets are working well, the short term outlook is one of increasing momentum. You can see it developing. But if the 10-year note and say the 30-year bond yields begin to move up, in other words, the10-year note begins to move aggressively above 4%, that is a signal that we are in some difficulty. There is basically this huge overhang of federal debt which we have never seen before. It is going to have a marked impact eventually unless it is contained, on long-term rates. That will make a housing recovery very difficult to implement and put a dampening on capital investment as well.”
“I am very concerned about the fiscal situation, not so much about the numbers, but the climate. One of the unfortunate fallouts from these huge amounts of money that we're putting in the budget and the Fed is that $1 billion is not what it used to be. You cannot turn someone’s debt down who is requesting $20 million or $400 million when we are talking about trillions. That adds up. It’s the culture. We cannot cut expenditures. We could not even cut the C-17.”
On whether a consumption tax would work:
“I think it would be a short- term fix. It will work in the short run. The problem is very much of the type of issue that Greece has got. Unless the underlying system contracts – the deficit contracts – it’s just delaying in the problem. I am not convinced by any means that we can succeed in stabilizing this long-term outlook strictly from a value-added tax. Because unless we come to grips with the fundamental issue, which is the fact that we have promised in the ways of benefits for Medicare and social security, physically more than we have the assets to deliver with. The economy can only grow so far. Right now, the claims on the real economy – forget finance –are getting larger and larger. Social security, I might add, is money. You can always print money. Medicare is not a defined benefit program. It is one based on the physical needs of the population.”
On whether the current financial regulation bill would leave the Fed weaker or stronger:
“Weaker. [Al Hunt: Does that concern you?] It does indeed.
“My basic problem is that people don’t understand how important it is for the Federal Reserve banks in the districts, how important they are to the functioning of monetary policy supervision and regulation and all the aspects of the central bank. I am concerned that if the Fed loses that aspect of its structure, we are going to find that what was originally the notion that instead of centering the central bank in wall street, which was the argument leading up to 1913, it was decided to go geographically and spread it around. What is in the bills right now, in my judgment, reverses that.”
On whether there is a bubble waiting to burst in China:
“I think so. To be sure, there are significant bubbles in Shanghai and along the coastal provinces. Some of that is going back into the hinterlands as well. Remember, the bursting of a bubble by itself is not a big catastrophe. We had a dotcom bubble, it burst and the economy barely moved. It is hard to tell when that bubble bursts, what the consequences are, because we do not have enough data on China.”
On the outlook for the Euro and the dollar:
“The unfortunate issue is that the dollar and the euro are both going down, if I may put it that way. Since the exchange rate is a ratio, it is very hard to tell what the actual dollar-euro ratio will be. It went up this morning with the temporary agreement. Both sides have a problem. We have a long-term deficit problem. The Europeans have the obvious problem in that they are dealing with Greece and the other peripheral states.”
On whether we could have seen the crisis coming:
“I look back at our monetary policies and I see it could have gone wrong, it didn’t. The problem, as best I can judge on the fairly detailed analysis of the evidence, is that the roots of that crisis are very broad and geopolitical going back to the end of the Cold War and the massive changes in flows of finances that brought long-term, real interest rates down. And the consequences of that created a major expansion in capitalized values for real estate, especially residential real estate, across the globe. Certain aspects of monetary policy probably had some effect.”
On Fed President Janet Yellen’s remarks that higher-short-term interest rates probably would have restrained the demand for housing by raising home mortgage rates:
“I think [that is wrong]. We tried to do that in 2004. We ran into a conundrum. For decades, every time the Fed raised its short-term rates, the 10-year note, which is really the proxy for mortgage rates, the yield went up with it. This time, it did not. And the reason it did not, is you cannot have the 10-year note determined both by arbitraged global finance and individual central banks. As a consequence of that…starting in the period where the sensitivity of the early stages of the bubble were building up, it was very clear that what was determining the rise in prices was movements in long-term mortgage rates going down, not the federal funds rate. And indeed, when the federal funds rate was purposely put down in 2003, long-term rates did not come down. As far as I can say, the general notion is just not supporting. The general notion that the Fed was the propagator of the bubble by monetary policy, does not hold up to the evidence.”
Response to critics who say that a proposed systemic risk regulator (which Greenspan does not want) could hardly have done a worse job than the current system did:
“They wouldn’t. But the problem is, that is not the answer to this issue. It is very evident to me that the underlying crisis was caused by what is clearly a once-in-a- century event. We have had almost no instances of short-term credit being withdrawn on a global basis the way it happened right after the Lehman bankruptcy. All of the individual evidence here is that this is a very rare occasion.”
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As head of the Fed for umpteen years, he fesses up he was unable to see US bubbles, ...... yet goes on now to say....ya, ya...I now see Chinese bubbles. Greenspan, STFU and go away!
I think that this is a really inappropriate question to ask from a Fed Chairman whether he saw the bubble coming or not, because obviously when you are right in the middle of it you can't see it growing. At least that makes sense from a purely physical perspective and otherwise we should assume something really really bad - that he is either clueless or even worse - omg no, he is evil and did that on purpose.
+100
Awash, my legacy in shame,
How be ascribed of blame,
Forsooth mine I cannot hold,
But of others, I shall be so bold.
Dude's in need of a good 12 Step Program's introductory pleasance of honesty with God, himself and another human being. Pitifully self-absorbed means of denying guilt.
Everyone in prison is innocent or "The lady doth protesteth to much, methinks."
Ativan, Thorazine or Hemlock?
Alan Greenspan described by Peter Schiff..... just priceless!
"Alan Greenspan is a TRAITOR....the worst American we've ever had"
http://www.youtube.com/watch?v=xxDwnRGruPs&feature=rec-LGOUT-real_rev-rn-1r-2-HM
There is no bubble in Chinese stocks.
At the moment, nobody is really interested.
Wouldn't surprise me to see the PBOC start to inflict some pain on the real estate speculators, but at the same time, start taking measures to encourage the public to start buying stocks.
This thing is tracing out a huge base.
Concur
I agree with Greenspan that China is in a bubble, in fact they have organized thier entire system around a bubble that existed in the West. Now that the West( Ponzi) has reached a climax stage , China will by default find it's rightful place as a failed communist state.
You put too much faith in labels. China has capitalist economic policies, not communist ones.
Few really understands what is going on in China. It's growth is a result of its industrialization, not some bubble (there is no such thing as an "industrialism bubble"--productive capacity is never a bad thing). The same think has happened in dozens of nations throughout the west over the last 400 years. I guess we've just forgotten about how it works, and now we assume that we are (were?) rich because we live in the west, even as we adopt the policies of African dictators.
But then, I guess "it could never happen here," right?
No.. sorry but at least in the West I can say what I want about the CCP. China like all herd states is a failure waiting to happen once the genius of the west can no longer sell usury.
Then you have something in common with Chinese, they can in turn criticize Obama anytime they want.
OK.. fine. Whats you're point? They may say as they please about Obama , and they can do that there or here, but don't you dare go there and tell the CCP you want another leader.
Sorry, just recalled an old anecdote:
Of course they can't criticize CCP, just like Soviets couldn't criticize theirs, but that's not news. China is different from the USSR in another respect - they are not officially in a Cold War with the West and hence don't spend as much money on the weapons as a % of GDP. Instead, they invest into some productive capacities and build pretty good infrastructure. So, don't expect them to collapse only because they had their bubble popped and because they don't have as much freedom as you do.
And they trade arms for oil contracts to keep Africa unstable.
Usually, a power tries to protect itself from subversion, from being overthrown. Fact to be able to criticize, or even blame a power is a loose indication.
Allowing blame can hint at blamers'helplessness. They keep blaming and are allowed to do so because the power in position knows that their blame is harmless and will change nothing at all. Why shall a power protect itself from powerless people?
It can be noticed that in the western world, a course of action has been taken and it has grown very hard to inflect. Does not look like people, citizens are able to modify it.
All it indicates is that in the Western world, the power structure is much more resilient than in China. In China, this power structure can still be destroyed. In the western world, where governments can rely on the use of the best totalitarian means, the power structure is less and less sensitive to citizens'actions.
Mind you, in China, the very same liberty to profess against the power in position is allowed. As long as it is harmless to the government, harsh blame is allowed, at all levels. It is easy to find people, taxi drivers and stuff who are blaming everything in the government.
The only big difference is that China is sensitive to trouble making empowered by foreign countries. For example, the US could empower those human right activists in China and with the US help, topple the chinese government.
This will help the US, probably the Chinese human rights activists. For the rest of the population, overnight, from oppressed people, they will turn into a bunch of rag tags unable to succeed because of their lazyness, genetical stock or whatever is used by Westerners to explain failures in people.
Right....ahem. Bubbles happen in early industrial nations all the time--as do depressions. Take a gander at the U.S.A in the depression department:
1807-1814
1837-1844
1873-1879
1893-1898
1921-1922
1929-1941
And capitalist economic policies in China? That's a bold statement. They've only had a banking system since the mid-1990's. They are somewhere muddled in undefined economic policy territory.
"Make it up as we go along" would be about right.
As for Alan Greenspan. He has reverse Alzheimers.
Save for the great depression, all of those financial panics were either extremely mild, or caused by wartime government intervention in the economy. The GD was, of course, caused by shitty Fed policy.
I wouldn't speak ill of China if you haven't been there. Opening a business in China is incredibly easy (for citizens), and taxes within their economic free zones are very low/non-existant. They got this model from Hong Kong, and in deploying it in all of thier major cities, have created the most powerful industrial base the world has ever seen. Although they do in fact have a large number of state-owned corporations, there are huge numbers of entrepreneurs. In some cities there are almost as many businesses as there are households.
The thing about bubbles is that they squander savings to give unsustainable growth. The thing about China is that 20 years ago, they didn't have any savings. They were all a bunch of poor communists. Today, they are a bunch of rich capitalists living in a system which is absent free speech and political expression. This is not a model we are used to in the West, but there is no reason for it to not be sustainable, at least in the absense of a fully free market that DOES have protections on personal freedoms. If a place like that existed, it would outcompete the Chinese. But it doesn't. The economic freedom in China trumps our economic socialism and our semi-protected personal freedom (in reality, we don't even have that any more).
If we are going to focus on labeling governments, it should be clear the the US is a fascist state.
Whether it is also a failed state is for time to demonstrate.
I wrote this comment on George Washington's latest post:
As for Greenspan, an ideologue can't see the errors of his ideology because it becomes a religion to him - a matter of faith. It is utter nonsense to say he didn't see this coming as he was one of the architects of this grand theft by the banksters. I'll show you one chart below to demonstrate my point:
Only an idiot didn't see this that the US banking and insurance industries were taking massive risks - which they passed on to other investors, like pension funds. I voiced my concerns and it cost me my job, but in the end, I was right, not that it matters because it didn't prevent massive losses on pensions. And now, they're back to the same old song & game.
There is no bubble in China, only more fear mongering. And there definetely is no bubble in Chinese solar shares, many of which make up the TAN ETF (I prefer individual stocks):
You voiced concern and then they threw you out!? What a morons. Be glad you don't work for such an employer anymore.
They probably tossed him for touting Chinese solar stocks
did you know Greenspan ran Nixons domestic campaign in 68'?
I think you would agree there is some bad ass real estate malinvestment? But that is not a bubble, right? I am not sure how the word bubble is to be used anymore?
I think you would agree there is some bad ass real estate malinvestment? But that is not a bubble, right? I am not sure how the word bubble is to be used anymore?
I think you would agree there is some bad ass real estate malinvestment? But that is not a bubble, right? I am not sure how the word bubble is to be used anymore?
+1
+1
+1
the only bubble I see are the Fed's interest rates at 0%, and the longuer it does, the more sure I am that gold will soon crash.
the longuer it does, the more sure I am that gold will soon crash.
Why?
i think this is unlikely - but here's how:
ZIRP implies financial assets - including FIAT currency - have no value. So a continued 0% wipes out all money, credit, currency, financial assets, etc. So as the supply of USD goes to zero, gold goes to infinity only in theory. in practice, it also trends toward zero as there is no currency available to measure it against. Gold could be used to acquire other physical assets, but its value - relative to physical things (think food, farming supplies, solar panes, rainwater collection tanks ...) falls. no one is going to have anything to buy gold with. certainly not by converting financial assets that have no value.
Is this bastard immortal or what , will he just please die and do us all a favour
Oh where to begin, where to begin with Sir Alan? Firstly, on the issue of bubbles, he was always very reluctant to even entertain that such a thing as a ‘bubble’ could exist (also, take at look at academic articles in the field of economics and finance and you will maybe find one genuine article on financial bubbles for ever thousand on the efficient markets). In fact, it wasn’t until after leaving office that he even accepted it bubble as a term. In his talks in front of Congress he was constantly contending that, at best, you could only identify a ‘bubble’ after it burst. Now, he just blithely says there are bubbles in China (and, what now the Dot.com bubble exists, and of course he always knew it?) but we cannot know how bad the bursting will be. Also, now the bursting of the Dot.com or any other bubble “by itself is not a big catastrophe”? What does he think is now happening with his real estate bubble? Senile doesn’t even begin to describe this guy.
Secondly, and even though I obviously abhor him and his successor, at least to his credit at times he would admit that the Fed was relatively clueless about being able to monitor its critical tasks. For example, during a conversation with Ron Paul (“RP”) back in 2000:
AG: The problem we have is not that money is unimportant, but how we define it. … We very much believe that if you have a debased currency that you will have a debased economy. … That does not mean that we think that money is irrelevant. …
RP: So it is hard to manage something you can’t define?
AG: “It is not possible to manage something you cannot define.”
Exchange between Ron Paul (“RP” – U.S. Congressman) & Alan Greenspan (“AG” – then U.S. Federal Reserve Board Chairman), February 17, 2000 (House of Representatives Committee on Financial Services hearing)
Thus, he is tasked with monitoring the nation’s money yet admits he can’t measure it very well, let alone define it. But that noted, and knowing that, why would you pretend to have a handle on things when you know you don’t? I could go on, but I’ll cut it short.
Thirdly, on the regulator/regulation issue, what the h_ll? His actions, let alone his words, speak volumes. What is wrong with that guy? Also, a ‘once in a century event’, does he really think this was a random exogenous event he and his organization had no part in? I’ve heard of cognitive dissonance, but he is a special case. I am truely sick of hearing that this is all some ‘black swan’ when it is convenient for people like him to say so, yet not bein called for it.
Finally, and before I blow a gasket, on the issue of whether a low short rate had anything to do with our current predicament, he really seems to be either just plain stupid or evil (or a combination). It’s basic and simple finance that he seems not to agree with. Also, even though the expectations theory doesn’t strictly hold (i.e., the medium to long term rates are an average of short rates), if you read the writing of Fed personnel (e.g., Benjamin Bernanke) they clearly assume that if you hold rates down, for example, you will cause financial asset prices to be higher than if you didn’t. Also, if you didn’t think you were having an impact on the economy and financial asset and liability prices by screwing around with the short rate, why the h_ll did you mess around with it in the first place? I could go broke throwing balls at him in a dunk tank. There, now I feel better.
"On the outlook for the economy:"
He speaks of a recovery when his former organization and its appendages bought the market. They bought it all with their firehose of endless excitement.
And that is the genesis of the "recovery."
"Please come out from behind the curtain. You need a shower and we can smell you back there."
Akin to Neo using his eyes for the first time, I too wonder what it is like to live in a non-credit / usury society. One that is stable. I want that experience.
Seriously, why does anyone care about what this man thinks? Why do they persist in giving him air time and print space??
Simple sir; so that he may rewrite history so his legacy of malfeasance won't be as legible. Greenspan was seduced by his masters, now he wants to confess, but his confessions are moot & hollow. He had is his time in the sun & he failed miserably. Maestro, your tune is flat & you are certainly out of time with the music...
China bubble and currency manipulation is part of the anti-China campaign. Scare investment out of China back to a so called safe haven the U.S. . The soveriegn debt problems in Europe will accomplish this too. Then the FED can reduce its exposure by reducing liquidity without disrupting the market, and gear up for QE2. Propaganda machine at full throttle. Whats next their human rights violations?
Why weren't we concerned about these issues during the past decade. We enabled them for our own interests. Now we are changing our agenda.
Well folks, here's the Maestro once again mentioning his infamous conundrum. There's just no way to explain it. We had the best minds in economics & finance & we never found the answer. Bubbles you ask, one just cannot see them coming & you just have to wait til they pop. Uh, huh... Rubbish Mr. Maestro, or should I call you Mr. Magoo?
Any child devoid of economics can see a parabola & the reverse collapse. Well, Magoo, do you see where we are on the 30 year cycle? You were just lucky enough to preside as FED head in the down cycle. You may be lucky sir, but you're not very smart.
http://i43.tinypic.com/2h6yagl.jpg
Believe his forecast at your own peril. He has zero credibility, except to defend his beloved Federal Reserve system.
Ron Paul questioning Alan Greespan in 2002. Paul noted our national debt 6T and expanding that debt 250B/yr. http://www.youtube.com/watch?v=0BHsonehpYs Man, we've blown past that point just 8 years ago!
Some men you just can't reach...
Being there character for Mr. Gardner was based Greenspan.
Bubbles are impossible to detect -especially if I create them! Unless they are Chinese bubbles.
Sincerely,
Alan
"Remember, it is the market value of equity in a financial institution that determines the ratings of its debt. It’s not the book value."
I find this a terrifying statement. He is suggesting that as long as they can push up financials stock prices, everything is rosy....
One does that by reducing the risk less rate and by supporting the asset side of the BS.
But making bubbles using this method, oh no, that does not happen. Sarcasm off
"Remember, it is the market value of equity in a financial institution that determines the ratings of its debt. It’s not the book value."
Every time I hear Alan speak, I get the baffle them with BS, because I use big words see how smart I am, Congress speak. The presentation is really a smart delivery, but then you realize that it was not very relevant or all together smart.
1) Today nobody really trusts the rating agencies anymore. Especially for a financial institution.
2) Book value is much more meaningful to investors than current market price when it can be calculated properly. However, with BHCs being able to hold massive amounts of debt off balance sheet we really do not know the true "book value" which is the stockholders equity.
Alan helped create the free use of derivatives and BHCs, and still does not understand their impact to his beloved "system" of old.
Mark Beck
I agree with Greenspans China analysis. But will add my own humble opinion to his well thought assault on the Giants of Mao.
I base my synopsis on Rising interest rates during the current false recovery (thanks to QE) with food based consumer goods sky rocketing. When Eventual stimulis withdrawl becomes a reality mid way throught this year, than the environment sets up well the sheep to be led to slaughter . A near future World Wide double dip recession and depression will follow, and trigger a huge debt based down surge in Southeast asia and Australia, NZ.
Every economic bubble imaginable will burst, deflation /inflation and all nasties in between will ravage the world economically. It might not happen tomorrow, but its on the way (2 years, 5 years , 10 years).
Farmland or a rural area with some dandelions and squirrels would be a good idea.
What impresses me is Greenspan's level of calculated obliviousness. It's like how I would expect an interview would go with the head of White Star Lines regarding what went wrong on the Titanic. The central theme is a denial of negligence and assertions of having been in full control with complete clarity at all times. Everything went according to plan. What happened was unforeseeable and a "once in a century event". But even more shocking is the stubborn and arrogant refusal to entertain thoughts that there might be something to be learned from the crisis with regard to the conduct of Fed policy for the future. After the Titanic, a North Atlantic iceberg reporting network was established that functions to this day.
I think we all know why. He can't admit that the central dogma of fed policy since the 1980s has created an oversupply of financial services relative to the productive economy. And that endorsing a purely deficitary, import-dependent service economy was folly. To admit that would be like experiencing that moment when Wile E Coyote realizes there's only air under his feet.
i bet greeny knows who sunk the titanic:
http://www.world-mysteries.com/doug_titanic1.htm
He can't admit that the central dogma of fed policy since the 1980s has created an oversupply of financial services relative to the productive economy. And that endorsing a purely deficitary, import-dependent service economy was folly. CAVIAR EMPTOR GETS THE ACADEMY AWARD. In 2 sentences you have summarized the core of what is wrong with the U.S. nation. I am certain most ZH'rs get it, but where do we go from here ? Isn't our current "leadership"- economic and political, chasing down the same old rabbit hole ?on Sat, 03/27/2010 - 13:48
#278205
Well folks, here's the Maestro once again mentioning his infamous conundrum. There's just no way to explain it.
*************************************
How about explaining it all simply--
You can't control the long bond-and-you can't fool gold--
Notice the exact coorolation between your chart and this one--
http://home.earthlink.net/~intelligentbear/dj-au-ratio-lt.gif
http://i43.tinypic.com/2h6yagl.jpg
Off topic--
remember the recent JPM/CFTC whistleblower--
On March 26th while out shopping with his wife, Mr.Maguire's car was hit by a car careening out of a side
road. The driver of the vehicle then tried to escape.
When a pedestrian eye-witness attempted to block the
driver's escape he accelerated at him and would have hit
him had the pedestrian not jumped out of the way. The
car then hit two other cars in escaping. The driver was apprehended by the
police after police helicopters were
called in and following a high speed chase.
Andrew and his wife were hospitalized with minor injuries.
They were discharged from hospital today and should make
a full recovery.
http://agoracom.com/ir/SilverStandard/forums/discussion/topics/410804-do...
“I think so. To be sure, there are significant bubbles in Shanghai and along the coastal provinces."
Jim Rogers must be screaming plagiarism right here.
Hey, I think I must be getting smarter! I didn't even click on the video of that bumbling,senile old fool Greenspan. I went on to read more important stuff.
I hate to play the Karl Denninger acolyte, but I feel have to bang the tin drum once again.
If the Fed thinks it can't prevent asset price bubbles and so won't even try, doesn't that imply that it can't prevent credit bubbles and won't even try? An asset bubble of economy-wide signficance almost directly implies a significant credit bubble in the overall economy, right?
And if the Fed believes that it can't prevent credit bubbles and so won't even try, doesn't that imply that the Fed believes it can't fulfil its explicit legal mandate and has no intention of even attempting to obey that mandate? You know, keeping 'long run growth of the monetary and credit aggregates' in proportion to economic growth?
And if so, isn't it all rather momentous stuff? Cheerfully implying to the public that your huge vital government agency is flouting the law, unfit for purpose, and all that? If you really believe (or believed) that, wouldn't you be obliged to run to Congress exclaiming this bad news? Rather than (bringing us back to do) making coy little pronouncements about asset bubbles - not even credit bubbles - to the media?
(I gladly admit that I, a simple drapier, could be missing something important in all this. But as the man said, I couldn't tell you what it is. I can certainly see that letting asset bubbles run their course could be compatible with long-run credit stability - but only if you actually let them run their full course, not if you "clean up" after the pop with monetary and credit easing that converts the short-term imbalance into a long-term imbalance.)
Nah, think you very close to what we all think here.
Greenspan again? Please, you got it wrong the first twenty times. Must have an attention need that he keeps popping up with nonsensical words of wisdom.
This guy should be recognized as the Paris Hilton of eco-fucking-nomics by now, right?
I won’t even listen to the f*cking @sshole who blew up the economy. POS, when he finally croaks, his ashes should be scattered in urinals around the country — save everyone a trip to p*ss on his grave.
lets see, the dotcom bubble burst in 2000, Bush took office, the stock indexes went down untio 2003, while JOBS WENT FLYING OUT THE WINDOW, and then Bush started the Iraq war (so ten years later we could appoint the logical successor to Saddam Hussien) and the stimulus package, (careful it looks a lot like an IED) blew up in 2008, and the market came to rest at half of what it was eight years earlier, but the DOTCOM bubble really had nothing to do with it. hmmmm
delete option please.
Muahahahaha! MUAHAHAHAHAHA!!!!
can't wait til his own bubble bursts in the form of an aneurysm.
lying pos scumbag saw the housing bubble over 30 years ago and helped create it.
http://online.barrons.com/article/SB120917419049046805.html
For the Dork from Cork (btw I F'nn love Cork!) I fuckin' HATE A'Lan Green-Span!
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