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Alan Greenspan's Greatest Bloopers, Part 1: "The Stock Market Stimulates The Economy"
Back on August 1, 2010, Alan Greenspan - who is once again making the media rounds in a desperate attempt to peddle his ridiculous book about forecasting (in which he explains it wasn't the Fed's models that were wrong; it was reality, and all those who inhabit it, that had a glitch) and is arguably the man who created the single biggest credit expansion in the Pre-New Normal era who no longer has access to the money printer so needs to sell books, and soon enough he may devolve to pitching newsletters - issued one of his most memorable post-Lehman bloopers. To wit: "if the stock market continues higher it will do more to stimulate the economy than any other measure we have discussed here." We decided to investigate his claim...
First, since August 1, 2010, the stock market has risen a mind-boggling 74%, or 18.2% annualized: a return that has outperformed roughly 95% of all actively managed hedge and mutual funds, implying his successor, Ben Bernanke, is easily one of the best portfolio managers of all time. Except for Bernie Madoff of course.
So, if non-Superman Greenspan was right at least this one time (because he never was prior to this, as he refused to apologize ealier) the economy should have performed comparable right? Wrong.
Here is a simple comparison between the most recently preceding period in 2010 and currently:
Then:
- Annualized GDP was 3.9% and 2.8% in Q2 and Q3, 2010
Now:
- Annualized GDP is 1.1% and 2.5% in Q1 and Q2, 2013
* * *
Then:
- Americans on foodstamps: 41.8 million
Now:
- Americans on foodstamps: 47.6 million
* * *
Then:
- People not in labor force: 84 million
Now:
- People not in labor force: 90.6 million
* * *
But, it's not all bad news:
Then:
- Household net worth: $60.8 trillion
Now:
- Household net worth: $74.8 trillion
* * *
And there you have it: despite the 70%+ increase in the stock market, the US economy is no growing at roughly half the pace it was back then, the middle class has seen 6 million people migrate away from the labor force, and into foodstamps... but at least household net worth has increased by $14 trillion.
So much for Alan Greenspan blooper #1: perhaps it is time for a minor revision: "if the stock market continues higher it will do more to stimulate the "wealth effect" of the 1% while stealing from everyone else than any other measure we have discussed here."
Which incidentally explains the Fed's policy for the past 5 years. Only it doesn't sound quite as palatable for Sunday morning TV if the former Fed chairman were to tell the truth that all it does now is to make the super wealthy super wealthier.
Oh, and don't expect anything to change. When in another three years the S&P is 70% higher than where it is now, driven purely by the Fed's balance sheet, and there is no US middle class left to even mention, well - we have these brilliant economists who have never held any real job outside of their academic ivory towers to thank. Of course, by then it will be too late to change the inevitable outcome, so well-rehearsed in a rather angry late 18th century France, but it is too late now anyway.
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Here's a new blooper: http://www.againstcronycapitalism.org/2013/10/alan-greenspan-says-us-stock-market-cheap/
Fuck you Greenspan. Whatta douche.
Short hemlines stimulate stock market rallies, lascivious male behavior, excess alcohol consumption, unprotected sex, irrational thought, full moons, diarrhea, hairy palms and pimples
lookit! another pony! I wanna pony, too!
yes, the economic stimulus of the higher stock market has caused an increase in the hiring of personal chefs, chauffeurs, body trainers, maids, sugar daddy website girls, and Jos A Bank (snark!)
Really? This is the master of the universe everyone looked up to? The stock market stimulates the economy? If there is no economy there is no market, stock or otherwise.
The stock market stimulates GAMBLING !! Now that is correct.
The argument will be made that the only alternative to crony capitalism/central banking will be socialism so that everyone can be equally destitute.
There is no other alternative to these two options.
There has to be, but humans have been too greedy and stupid to discover it. A sound argument can be made that we could have a Utopian society IF the governments of the world stopped militarization. Alas, since humans are not that far removed from swinging in the trees and our favorite pass time is killing each other, disarmament will never happen.
"Fuck you middle class! You should have worked harder!" Ayn Rand
Alan! Alan! Alan! Al !! http://www.youtube.com/watch?v=xaPepCVepCg
and who can forget the classic "Alan Greenspan.. are we fucked?"
http://www.youtube.com/watch?v=RYA0DsPcbaU
i wonder if guillotines will be used or AK 47's? we'll find out in a few years....maybe
Water pistol.
Water pistols should be banned as they cause boys to grow into hostile belligerent uncivil social misfits and violent mentally ill wards of society.
Another threat to society, like raw milk
They can be filled with bleach, and are thus chemical weapons.
Guys, guys. It's scissors, remember.
Yes, water pistol. I heard water melts the shape-shifting lizard people impersonating human leaders
You promised you weren't going to tell anyone else!
the sooner the better. Hopefully a few days weeks or months. They've HAD their years. It's time to start hanging these assholes.
I am reminded of the Thermidorean Reaction. Thats why I still think people need to become more aware, better educated, with regards to the problems we face.
"Keep your eye on the birdie, while we kick you in the nuts." -- Alan Greenspan
greedscam
Thank goodnesss they have the steady hand of Janet Yellen coming in.
Zimbabwe style stock market here we come...UP, UP, UP.
Don't make fun of her, she's a frail female in a man's world.
Obie said she saw the crash coming and fixed everything
I don't have detailed data on Zimbabwe, but some of the economic trends in Wiemar Germany mimic what we see today (rising stock markets and monetary wealth, w/o corresponding industrial production & trade growth).
http://www.nber.org/databases/macrohistory/contents/de.html
(a bit more mathematical than the money supply graph from Wikipedia- but then neither Wikipedia, nor Bernanke's writings are authoritative sources for good information on the economics of Great Depressions.)
The opposite is probably true. Why invest in growing the business when you can buy back shares? Bwahahaha.
If the cost of money(interest rates) is low, then the desire to produce money( real profit growth) falls as well.
If it was more expensive to borrow money, people would be busting their asses to earn more of it on their own.
If the cost of sugar was at all time lows, would sugar producers be busting their asses to produce more? No.
If the cost of gasoline was at all time lows, would the refiners be busting their asses to produce more? No.
..
Yes, he got it wrong. The answer is inflated house prices.
once you turn the tv off its doom and gloom around that is the sand box
The stimulation of my stocks causes tumescence in my core economic driver.
"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
- Alan Greenspan, Gold and Economic Freedom, 1966
Re: Alan Greenspan, Gold and Economic Freedom, 1966
So, that means, the "conspiracy" about the shape-shifting lizard people impersonating human leaders in order to take over the world is making more and more sense.
Some sort of dark change came over him when he walked into the FED building that fateful day.
Look at his face, it's as if he has been possessed all these years?
Will the real Alan Greenspan ever be allowed free again?
Alan Greenspan is the Darth Vader of economics.
Guess he replaced truth and sound reasoning for a lot of money and power.
They call that being corrupted, don't they?
Satan made him a sweet deal I'm sure.
Burn in Hell Greenspan!
BURN!!!
How can a man so smart be such an idiot?
who said he was smart? Everyone thinks that if you go to Harvard or Yale you're really really smart
Yale: George Bush, John Kerry
Harvard: All the other lying thieving miscreant murderous motherfuckers.
These "schools" just teach these bastards to be better criminals.
Better? No, I think the word you're looking for is "loyal."
"How can a man so smart be such an idiot?"
He is not an idiot, he is a criminal.
Man?
It's not just one old eccentric, delusional man... the whole "Governor" structure at the Federal Reserve Board has bought hook, line and sinker into the research that supports this "stocks drive the economy" thesis. Part of Bernanke's justification for ZIRP/QE2 (and obviously QE3) followed this line of reasoning to the letter.
As pointed out from the evidence, the strategy and expected relationships have worked very poorly at this advanced stage of balance sheet expansion. Time in and time out, the Fed's estimates for real GDP have missed the mark to the downside-- and by significant amounts.
Of course, if what you're doing as a money printer doesn't work... you just print more money until you get the answer you want. That, sadly enough, is the mainstream line of thinking... and something that Yellen will embrace going forward.
Early on in the QE program, an alert (or lucky) journalist actually asked Bernanke in 2010 at what point does the Fed balance sheet become too "big". And perhaps, because he just didn't see it as a possibility, Bernanke surmised that problems would begin to develop around the $9 trillion level.
Without a major financial reset or a war, there is little doubt in my mind we will get there. It's just a matter of 'when'... because unfortunately, our thought leaders have went way too far down this stinky-assed foxhole.
Now just who in fucking hell would purchase Greenspan's book? And, just how long was that chump Fed chief? Scoundrel.
Idiot fund managers/finance types who want to appear intelligent by having it sitting on their bookshelf at work.
Anytime you see someone's shelf full of the latest "must read" books, take notice that nary a spine has been cracked, nor does a single bookmark exist.
And on the rare occasion you note that these books have been read.. RUN!
"Intellectual" Kool-Aid drinkers are the absolute worst people imaginable.
I'd consider them more intelligent if they had The Situation's latest book on their shelf over this crap.
But it will NEVER be too late to HANG THE MOTHERFUCKERS.
(in which he explains it wasn't the Fed's models that were wrong; it was reality, and all those who inhabit it, that had a glitch)
Epic.
That is not a woman in our bed. Who are you going to believe...Me, or your lying eyes?
More spinning plates. ...
Andrea Mitchell fvcks that freak...lends to the term, "Presstitute"
Waterboard that motherfucken Joo with Hydrochloric Acid, I say
Alan. You did it. It was you. Your spawn continue to do it since you left. You have enabled reckless free spending to continue out of Congress. You and Ben have engendered 3 epic bubbles, two of which have crashed with devastating consequence and the 3rd of which is building at present and will suffer an equal fate. Each more devastating than the last, with terrible misallocation of financial and human capital resulting.
You are more than a disgrace. You are, supposedly, an educated person who wielded a lot of power. You used that power to create asset bubbles which you foisted on an unsuspecting public who didn't know how to protect themselves. You turned capital markets into a casino. You helped destroy the dollar and, as a result, fundamental property rights.
You are an ass of the highest order.
Any clarinetist wanting something else to do would do.
They wanted Greenspan to do it.
http://www.thomhartmann.com/blog/2005/07/greenspans-fraud-how-two-decade...
http://smu.edu/experts/stories/batra-qna.asp
@:
He helped raise the payroll tax in 1983 in order to cut the Reagan budget deficit but sold his plan to the public as Social Security reform. No wonder there is no cash in the Social Security Trust Fund today.
(Citebite's not loading for me currently.)
Give him a break. End of day he has to go home and pork Andrea, a woman so tightly botoxed her head bobs with his every stroke.
Please just die Alan. Put the world out of your misery
The stock market simulates the economy.
FIFY, Alan Baby.
What angry people you are. Mother didn't love you?
HIS HEAD ON THE GRAPH EXCELLENT !!!
A La Greenspam did what he was suppose to do: make the rich richer!