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Alan Greenspan's Nine Reasons "Why The Economy Stinks"

Tyler Durden's picture




 

Yesterday, former Fed Chairman Alan Greenspan was the keynote speaker at KPMG’s 2014 Insurance Industry Conference Tuesday, where he answered questions such as 1) where the economy is going, 2) why, and 3) when (if ever) is it likely to improve. The answers, as reported by Property Casualty 360, are: 1) nowhere fast, 2) because nobody is willing to invest, and 3) eventually, but nobody can tell when. He listed 9 specific reasons why the "economy stinks", although surprisingly, nowhere did he mention the fact that the current and future economic disaster is all a direct result of his ruinous reign at helm of the Fed where as a result of his "great moderation" and the Fed's catastrophic monetary policies conceived mostly under Greenspan himself, the economy is now perpetually stuck in a boom-bust cycle, and where every time a bubble bursts another has to replace it or else the entire western way of life will be gone in a heartbeat.

So without further ado, here are, in reverse order, Greenspan's 9 reasons why the S&P 500 is at an all time high the economy is a complete disaster (thanks to the Fed).

9. Lack of confidence.

The U.S. economy is in a state of extraordinary change, Greenspan said, the likes of which he has never seen before. The most interesting thing about the current recession and recovery, he said, is that in the 10 recoveries we saw since WWII, every one except the current one was led by construction, essentially. This recovery is so sluggish because construction is, as Greenspan so delicately put it, “dead in the water.” The reason why construction is so dead is due, in part, to excess capacity built up before the economy crashed in 2008. But more importantly, businesses and households across the board are so skeptical of the future, they’re not willing to invest in it. Nobody is putting money into longer-lived assets, and until they do, the economy won’t really return to form.

Case in point: in the early 1990s, the amount of liquid cash assets companies were willing to invest in illiquid, long-term assets was way higher than it is now. You also see this in the yield spread in 5-year U.S. Treasury notes versus 30-year U.S. Treasury bonds, which is the widest in U.S. history. Why? Because people are far more willing to invest on a 5-year return than a 30-year one. That speaks to the depth of the worry people have in the future. And that kills growth.

 

8. Renting instead of buying.

The same is true in U.S. households. The single-family home construction market collapsed in the 2008 crash, and it induced a major shift; many more houses that are being built now are meant not for sale but for rental. Home ownership is way below where it was years ago, and there is no evidence that even with rising home prices that this will change any time soon.

That speaks to the degree of economic malaise in the U.S., Greenspan said. Unless we can change that, then we can’t change the effective demand needed to move the economy forward. And with effective demand several points below where it ought to be - with our economy working well below capacity - that is where our unemployment and overall economic weakness comes from, hanging around like an unwelcome house guest.

 

7. It’s a global problem.

This is not unique to the United States, Greenspan noted.

The “very tricky fiscal problems” that the United States is facing are fundamentally the same that are being faced by developed economies across the world, from the UK. Germany and the Eurozone, Ukraine, Japan, and elsewhere. Construction as a share of GDP is the same in these places as in the U.S., essentially, and construction remains down across the board. People are heavily discounting the future, Greenspan said.

One example is in how corporations evaluate the probable rate of return on a specific facility and then wonder what the variance on that return might be. That variance is really what the executive committees of corporation are really interested in, Greenspan said, and if a project is supposed to have a 30% yield, but there is a 10% chance of it returning a -10% yield, then the project will be dead in the water.

In this kind of environment, corporate tax rates become impossible to estimate, and that results in a serious curtailment of expenditures. When people don’t have a clue what the tax rate will be 20 or 30 years from now, and they have projected income from those years, then it drives up the effective cost of current projects.

China is the one part of the world where this isn’t a problem, but that’s about to change...

 

6. China’s debt bubble is going to burst.

China’s overall level of debt has gone from 140% of its GDP to 230% of GDP, which Greenspan glibly remarked is a sure sign that the Chinese economy is becoming overleveraged. It is requiring ever-larger amounts of social debt to fuel the country’s growth rate.

Greenspan noted that China has had “a remarkable run” the likes of which have never been seen before in measurable history. But, its gains in productivity and standards of living were all done with borrowed capital and technology. Annual lists of the world’s most innovative companies feature no Chinese companies, and nearly half of those lists are made up of American companies. This is leading to a narrowing productivity gap between China and the U.S. that is putting serious pressure on the Chinese economy.

The reality is that China is hitting the ceiling and its growth rate must slow. But when you have a one-party political system, there usually isn’t a whole lot of out-of-the-box thinking, which is precisely what China needs right now. And since you can’t divorce economic thought from political thought, this does not point toward good things for China. The Chinese hierarchy is acutely aware of this, Greenspan said, and it plans to allow a number of companies go into bankruptcy.

This is big, since most of the institutional lending in China has been backed by the government. There is a substantial amount of essentially shadow banking that operates with the same presumed backing of the government, but that backing is not really there, and the government is about to let some companies know that the hard way. Look for some Chinese defaults in the future, perhaps in its seriously overextended steel industry or elsewhere in tis manufacturing sectors.

That said, Greenspan also noted that while bubbles, by definition, burst, not all bubbles are toxic. The dot-com bubble bursting in the 1990s was individually ruinous for many people, but it was not an institutional bubble. The subprime mortgate situation in the late 2000s was an institutional situation. China knows the difference and is doing everything to ensure that when its bubble bursts, it'll be the first kind of problem and not the second kind. Will they succeed? Who knows.

 

5. A diminished U.S. military means an unstable world.

Greenspan noted that at the end of the Cold War, the U.S. was left standing as the sole superpower, and it used its military heft to act as the world’s policeman, suppressing conflict in a number of hot spots for a number of years.

Until recently, the share of gross domestic savings from business, households and government as a share of various forms of entitlements remained relatively constant. What we’re talking about here, really is Medicare and Social Security, which Greenspan described as the “third rail of American politics.” And there is serious growth there that is not going to stop, as the Baby Boomers get older and as Seniors live longer lives. These entitlements, Greenspan noted, tend to rise the most during Republican administrations, but they’re rising across the board, and unless we slow the rate of growth in our entitlements, the reality is that eventually, we will have to cut military spending to afford it all.

Greenspan pointed to Russia’s “Czarist” expansionism in Ukraine, and Vladimir Putin’s implication that what would be best for Russia was to restore the Soviet Union. He pointed to clear commitments to protect NATO nations against Russian aggression. And he pointed to the rise of ISIS in the Middle East means that the U.S. will have to get further involved in that region to protect the world’s oil supply - something only the U.S. can do.

This all points to severe strain on the U.S. military at a time when our spending on it is poised to fall, and fall dramatically. This means that hot spots that had been kept calm are likely to explode, and this will create further uncertainty across the world, which will help the economies of exactly nobody. The military budgets will have to go up, but with no will to raise taxes or cut other costs, the only solution to this particularly sticky wicket, Greenspan said, is “to repeal the laws of arithmetic.”

 

4. Interest rates and inflation.

Eventually, interest rates have to rise, Greenspan said, with the kind of vagueness that comforts no insurer who has seen their investments wither on the vine for the last five years or so. Greenspan said that a figure that interests him is that interest rates in 5th century Greece are pretty much the same as what they have been in the last 50 years or so across the globe.

There is something inbred into the system, he said, and inbred into the propensities of human nature that regulate interest rates. The long-term yield on things like stocks, real estate, earnings, etc., are critical and can’t stay at zero forever, and wouldn’t even be there if we weren’t keeping them there. The rates are suppressed, Greenspan said, because the Federal Reserve has absorbed so many mortgage-backed securities and U.S. Treasuries.

We have to taper at some point, and things will only turn around once we see commercial and industrial loans tease that money out of the federal system and paid out to the commercial markets. This is a necessary condition for inflation. It is not happening yet. But it will. And when it does, Greenspan says, it will surprise us with how quickly it moves. Be prepared.

 

3. Regulatory over-reach.

Greenspan is not a fan of recent regulatory developments, especially Dodd-Frank.

The principle of regulation, he said, is that it identifies a problem that exists in the system, and implies that if that problem is solved, the system will return to functioning as it ought to. This requires a good conceptual view of how the financial system works. The legislators who crafted Dodd-Frank did not have that view, and as such, they crafted an unholy mess of a law that can’t even be implemented.

Case in point: The day President Obama signed Dodd-Frank into law, Ford Motor Credit had a $1 billion asset-backed entity, but the SEC now required all asset-backed instruments to have a credit rating. But because Dodd-Frank stipulated that credit rating agencies must assume partial responsibility if the firms they rate go pear-shaped, Ford couldn’t get a rating for their instrument. So what did Ford do? They simply ignored the rule.

And they’re not the only ones, Greenspan noted. There are a huge number of cases where Dodd-Frank is simply not being enforced because the law doesn’t work.

The problem is that this is the kind of law that you can’t really unwind. Once you hire regulators, Greenspan said, their job is to regulate...and they will always find something to regulate. So while the law doesn’t work, we’re stuck with it.

“Undoubtedly, there were some very questionable practices prior to the financial crisis,” Greenspan said. A lot of it was in credit default swaps, which were a form of derivative. But interest rates are also a form of derivative, as are foreign currency exchanges and even wheat. There was a huge market for over-the-counter derivatives that went through the financial crisis without a single default because those markets worked exactly as they were supposed to, but now, they have extra regulation, essentially because of guilt by association.

None of this regulation helps the economy get back on its feet, Greenspan suggested. And just because there is evidence that Dodd-Frank isn’t working, and likely will never work, to think that is evidence it will be abandoned, he said, “is a non-sequitur.”

 

2. A lack of leadership.

Greenspan has worked with five Presidents, and he ws quick to point out the two which he felt were the most effective at getting what they wanted done, done. And those were Ronald Reagan and Bill Clinton.

“The President has got to have an extraordinary number of characteristics, both of which Reagan and Clinton had,” Greenspan said. “They have to have a sense of what kind of democracy we have in this country and value systems and rule of law. And they have to have a sense of the history of it all. And they have to be able to convey to the populace where they think they are wrong.”

As an example, Greenspan cited Bill Clinton’s decision to bail out the Mexican government in 1995, despite the fact that he knew for certain that had this gone to a vote before Congress, it would have failed, and overwhelmingly so. But Clinton knew it had to be done, and that it could cost him politically, and so he crafted a way to make the monies available to Mexico. Mexico ultimately never drew on them, but the crisis disappeared.

“That is leadership,” Greenspan said. “And there were many similar ways in which Reagan did the same thing. The crucial issue is, are you a leader or a follower?”

Both Reagan and Clinton knew how to read polls well, but they weren’t going to let themselves be run by them. Much as we like to believe that we could run the government by referendum, the reality is that all we’d get from it are 100% of the people wanting more spending, and lower taxes. The political world wants things that range form the unrealistic to the impossible, and it falls to the President to run counter to that, and not every President has been equally able to do that.

Greenspan didn’t call out President Obama by name (or either President Bush), but draw your own conclusions.

 

1. Nobody appreciates insurance enough.

The insurance industry as we know it - or at least the actuarial mathematics that underpin it - got rolling when two Scottish ministers in the 18th century devised a fund that would take care of their widows, and the actuarial methods they used were pretty spot on and have not really changed that much since. Insurance, Greenspan said, is really nothing more than saving for a rainy day. And insurance, by its construction, is a major form of savings for this country.

“The whole structure of the industry is the mechanism by which you’re converting consumption into savings,” Greenspan said, “and the only way the economy can grow is to save.”

Insurance, he noted, is the most formidable mechanism we have to save as a society, and the economics of insurance have not been given proper weight by economists in how they look at the world. That is why the insurance industry needs to thrive and to be given the support it needs to thrive; getting the optimum amount into savings and investing in cutting-edge technologies are the only real way to get our standard of living to grow. And insurance is at the heart of it.

* * * * *

Greenspan's incoherent ramblings aside, we don't know if we should be more stunned that Greenspan has clearly summarized the bulk of the reasons why none other than Zero Hedge repeats day after day that the economy is nowhere close to growing or "recovering", or because with statements such as this:

“The whole structure of the industry is the mechanism by which you’re converting consumption into savings,” Greenspan said, “and the only way the economy can grow is to save.”

... it is revealed that the man who unleashed the worst Keynesian nightmare in the history of the world is in fact... an Austrian?

 

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Wed, 09/10/2014 - 11:42 | 5201977 maskone909
maskone909's picture

quite amazing how mr greenspan manages to give commentary on the markets in between his diaper changes and applpesauce feedings.

Wed, 09/10/2014 - 11:44 | 5201993 Stuck on Zero
Stuck on Zero's picture

He probably receives $500K for each tidbit of economic analysis that supports the bankers.

Wed, 09/10/2014 - 11:47 | 5201998 Pinto Currency
Pinto Currency's picture

 

 

Try: the economy is being crushed by $60 trillion of total credit market debt outstanding in the US because of loose Fed monetary policy by Greenspan and successors.

The best you are allowed to hope for now is a bubble somewhere.

Wed, 09/10/2014 - 11:49 | 5202013 kliguy38
kliguy38's picture

Thnx you fochin "puppet Maestro".........May your Ensure spill onto your chin and into your diaper .........YOU POS

Wed, 09/10/2014 - 11:52 | 5202039 Relentless101
Relentless101's picture

Reason 10: Becuase I start this fucking diabolical plan. (cue Bezos evil laugh)

Wed, 09/10/2014 - 12:01 | 5202084 Anusocracy
Anusocracy's picture

Didn't they talk about idiots running things in a post yesterday.

This is from a Fed idiot

Wed, 09/10/2014 - 12:10 | 5202144 Doubleguns
Doubleguns's picture

Posting anything Greenspan has to say is sheer nonsence. I am hoping most are missing Tylers atempt at humor here. 

Wed, 09/10/2014 - 12:13 | 5202151 Bananamerican
Bananamerican's picture

9 reasons?
Yeah, they're G.R.E.E.N.S.P.A. And N.

Wed, 09/10/2014 - 12:14 | 5202153 Pinto Currency
Pinto Currency's picture

 

 

Greenspan is ill.

Best not to pay attention to him.

Wed, 09/10/2014 - 12:25 | 5202212 linniepar
linniepar's picture

I miss Bernanke's quivering voice, said no one ever.

Wed, 09/10/2014 - 13:09 | 5202449 COSMOS
COSMOS's picture

The number one reason is.......... Cause he was the Fed Chair and the other dual citizens still run the Fed and Dept of Treasury Show.

Wed, 09/10/2014 - 13:30 | 5202537 Manthong
Manthong's picture

10. You.

Who was Fed Chair when Glass-Steagall was murdered and  Bucket Shops were legalized?

 

Wed, 09/10/2014 - 13:52 | 5202683 Georgia_Boy
Georgia_Boy's picture

Confidence is the bullsh!t all-purpose dodge, when the speaker doesn't feel like probing for the real reasons or doesn't want to stick his neck out and say them.  Be Confident!  It's the economic reform plan for the self-esteem generation.

So if the problem is we don't save, the Obama solution would be let's push MyRA some more?  The government will be happy to invest your savings for you.  We know retirement planning is hard and we're here to help!  Your balance will never go down!

Wed, 09/10/2014 - 14:51 | 5202969 Four chan
Four chan's picture

since he raised rates 6 consecutive times, the whole charade has been fucked up.

Wed, 09/10/2014 - 12:14 | 5202154 whotookmyalias
whotookmyalias's picture

1 reason why the economy stinks. Corruption.

Wed, 09/10/2014 - 12:05 | 5202114 Dr Strangemember
Dr Strangemember's picture

OH, so NOW he starts being honest?????  

Wed, 09/10/2014 - 11:48 | 5202008 pods
pods's picture

Ahhh, the rapist telling us why it is our fault.

Man what I wouldn't give to see this fuckers head on a pig pole!

pods

Wed, 09/10/2014 - 11:46 | 5201995 Pinto Currency
Pinto Currency's picture

-

Wed, 09/10/2014 - 11:45 | 5201999 NidStyles
NidStyles's picture

Despite them having him by the short hairs with something that is probably horrible, I have compassion for him as he is still a human. I can only imagine how tortured he must feel. 

Wed, 09/10/2014 - 11:48 | 5202007 LawsofPhysics
LawsofPhysics's picture

Precisely why my suggestion is the only humane thing to do.

Wed, 09/10/2014 - 12:22 | 5202200 Ratbagger
Ratbagger's picture

I like how you think.

Wed, 09/10/2014 - 12:38 | 5202271 NidStyles
NidStyles's picture

At least some of you caught the joke.

Wed, 09/10/2014 - 13:24 | 5202525 Redhotfill
Redhotfill's picture

You should have ended the comment with  "Sarc off"

Wed, 09/10/2014 - 14:12 | 5202780 DOT
DOT's picture

s/off

Roll 'em.

 

Wed, 09/10/2014 - 12:04 | 5202110 yogibear
yogibear's picture

He feels no guilt. Animals have more compassion than this guy.

Wed, 09/10/2014 - 12:08 | 5202138 Anusocracy
Anusocracy's picture

I don't consider psychopathic servants of the state as human.

Man appears to be the missing link between anthropoid apes and human beings.
— Konrad Lorenz

Wed, 09/10/2014 - 11:47 | 5202000 Dr. Richard Head
Dr. Richard Head's picture

I love that applesauce. So good. https://www.youtube.com/watch?v=d8oIsfVv1wI

Wed, 09/10/2014 - 11:46 | 5202005 yogibear
yogibear's picture

This guy created the financial messes and screwed people trying to fix the problems like Brooksley Born.

 

Wed, 09/10/2014 - 12:07 | 5202128 chunga
chunga's picture

1. Alan Greenspan
2. Ben Bernanke
3. Janet Yellen
4. Tim Geithner
5. Lloyd Blankfein
6. Henry Paulson
7. Hank Greenberg
8. Jamie Dimon
9. Blythe Masters

Wed, 09/10/2014 - 14:56 | 5202986 Four chan
Four chan's picture

Create the bubble with easy money. Collapse the bubble with successive int rate increases, all the borrowers go under water enslaving them to you, many default allowing you to capture those assets people have worked their lives for, for nothing more than paper. the tentacles of the fed, their franchises, the banks, get swamped with all these assets, the owner (the fed) creates an equivalent amount of money to the bubble it created in the first place and "buys" all the "bad" mbs its tentacles have now acquired, both devaluing their debt slave's savings by that amount and capturing all those yummy house assets for the feds true owners/creators. the system called federal is working perfectly for its owners, and i know none dare call it treason but someone really should. on a side note, if the fed is a private corporation, and it is, why doesn't it pay taxes? Must be a religion like apple.

 

Ps the tentacles (the tbtf) has used all the new money to buy the market with zero risk zirp funds, which is clearly the only thing driving the market.

Wed, 09/10/2014 - 16:23 | 5203411 marathonman
marathonman's picture

Theoretically they have to pay 90% of their 'profits' back to the government.  Whatever.  The (un)Federal (non)Reserve note is still a Ponzi scheme and the Fed's an evil bastard child that should have never been born.

Wed, 09/10/2014 - 15:10 | 5203052 yrad
yrad's picture

Corzine's gotta be in there! Put him at #3.5

Wed, 09/10/2014 - 12:13 | 5202157 Uncertain T
Uncertain T's picture

I clearly remember the day an investor friend informed me that Mr Greenspan was being named to head the Fed.... I asked my friend.. "You mean that knucklehead who gives crappy editorial commentary on Nightly Business Report?"  my friend replied... "Yep that's the guy"

Wed, 09/10/2014 - 13:52 | 5202679 Leveraged Algorithm
Leveraged Algorithm's picture

Here is what he said...
1. Because of me
2. Because of me
3. Because of me
4. Because of me
5. Because of me
6. Because of me
7. Because of me
8. Because of me
9. Because of my sister Janet......

Wed, 09/10/2014 - 14:05 | 5202752 JB
JB's picture

Fuck Alan Greenspan.

Fuck the 'economy.'

Fuck this debt based neofeudal system.

Fuck the bankers.

Oh yeah, and especially, FUCK the politicians that make it all happen.

Wed, 09/10/2014 - 15:05 | 5203027 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Fuck Alan Greenspan.

Fuck the 'economy.'

Fuck this debt based neofeudal system.

Fuck the bankers.

Oh yeah, and especially, FUCK the politicians that make it all happen.

They are all fucked.

The wish is granted.

Long live Jambi.

Wed, 09/10/2014 - 11:42 | 5201978 Devotional
Devotional's picture

is this a joke Alan???

Wed, 09/10/2014 - 11:56 | 5202057 alfred b.
alfred b.'s picture

 

     I'd say that Alan is the joke!

Wed, 09/10/2014 - 12:12 | 5202150 Anusocracy
Anusocracy's picture

Every day is April Fools Day for Alan Greenspan.

Wed, 09/10/2014 - 11:43 | 5201980 jubber
jubber's picture

...and nothing about America's titanic debt then?

Wed, 09/10/2014 - 11:43 | 5201982 AccreditedEYE
AccreditedEYE's picture

Who cares about the real economy? Keep the stimulus coming and keep buying the f-ing dip!! That's what you taught us Alan!

Wed, 09/10/2014 - 11:43 | 5201983 LawsofPhysics
LawsofPhysics's picture

oh the hypocrisy...

 

execute this fuck already...

nothing changes otherwise.

Wed, 09/10/2014 - 11:51 | 5202031 813kml
813kml's picture

Why aren't this fossil along with other bringers of misery like Kissinger, Brzezinski, Cheney, Rumsfeld, et al fucking dead yet?  Only the good die young.

The narcissism is disgusting, spellcheck even corrects the spelling of their putrid lastnames!

Wed, 09/10/2014 - 12:49 | 5202105 Squid Viscous
Squid Viscous's picture

it's really amazing... you forgot Soros and Albright, both crypto-jews par excellence...she's gotta be pushing 90 now? i would wiki it, but would make me even more angry having to scroll through her bio... maybe can all be explained by:

https://www.youtube.com/watch?v=ttbaXI7-r6U

Wed, 09/10/2014 - 15:10 | 5203053 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Why aren't this fossil along with other bringers of misery like Kissinger, Brzezinski, Cheney, Rumsfeld, et al fucking dead yet?

Satan's options on their souls are bigtime in-the-money. The only reason I can think of that he hasn't cashed them in yet is that he expects even more evil fuckery from them and is trying to time the top.

Wed, 09/10/2014 - 11:44 | 5201989 yogibear
yogibear's picture

Hey Greedscam,

How about too much debt? Where is that on your list? 

You helped create the financial bubbles and messes. 

Wed, 09/10/2014 - 11:44 | 5201990 Dr. Richard Head
Dr. Richard Head's picture

I threw up in my mouth a bit half-way through reading.  These megalomaniacs make me ill. 

Wed, 09/10/2014 - 11:46 | 5201996 oldmanofthesee
oldmanofthesee's picture

It's any wonder that his mind is muddled. He has to sleep with Andrea Mitchell.

And, come to think of it, vice-versa.

Wed, 09/10/2014 - 15:11 | 5203057 TheFourthStooge-ing
TheFourthStooge-ing's picture

They deserve each other.

Wed, 09/10/2014 - 15:14 | 5203072 Ralph Spoilsport
Ralph Spoilsport's picture

They go together, like traffic and weather.

Wed, 09/10/2014 - 11:46 | 5202002 Fix-ItSilly
Fix-ItSilly's picture

Not a mention of population demographics and its impact on "growth" or the need for "growth".  I guess that's too obvious. A PhD can't bamboozle the plebs with population demographics.

Wed, 09/10/2014 - 11:47 | 5202004 Zeptemberalevin
Zeptemberalevin's picture

a Zionist poster child endangering the world with toxic monetary policies aimed to do one thing: 

ensure the Rothschilds/Rockefellers/et. al are still in charge, even if it means moar WAR, famine, disease, and financial armageddon. 

what a life we live in :) 

Wed, 09/10/2014 - 11:49 | 5202019 yogibear
yogibear's picture

He could do better for the planet  if he was fed to the sharks in the ocean.

Wed, 09/10/2014 - 11:49 | 5202009 Calculus99
Calculus99's picture

5. A diminished U.S. military means an unstable world.

It might also mean less killing of non-whites. Note that point, because it's never whites is it (and I'm white, which I suppose means I'm sort of safe)?

Wed, 09/10/2014 - 11:59 | 5202074 25or6to4
25or6to4's picture

Calculus99
"it's never whites is it?" Really? No whites killed in WWI,Ii Bosnia or Ukraine?

Wed, 09/10/2014 - 12:02 | 5202106 TabakLover
TabakLover's picture

Greensapn is a MIC lackey...................but who in power isn't?

Wed, 09/10/2014 - 12:37 | 5202270 LawsofPhysics
LawsofPhysics's picture

The history of Europe is not on your side when it comes to some of your broader assertions.

Wed, 09/10/2014 - 12:44 | 5202302 PrecipiceWatching
PrecipiceWatching's picture

Are you abjectly ignorant regarding history, or deploying some sort of deep hidden irony?

Wed, 09/10/2014 - 12:44 | 5202303 PrecipiceWatching
PrecipiceWatching's picture

Are you abjectly ignorant regarding history, or deploying some sort of deep hidden irony?

Wed, 09/10/2014 - 14:18 | 5202810 DOT
DOT's picture

This product feature placement was brought to you by the MIC and thoughtfull taxpayers like you. Thank-you.

Wed, 09/10/2014 - 11:49 | 5202011 Oquities
Oquities's picture

1. I inflated the sub-prime, CMO housing bubble.  It still hurts.

Wed, 09/10/2014 - 11:50 | 5202012 Squid Viscous
Squid Viscous's picture

fuck you greedspan, gas chamber would be too merciful...and your wife is one of the ugliest twats I've ever seen

Wed, 09/10/2014 - 11:50 | 5202018 Latitude25
Latitude25's picture

I can't think of anyone who did more single handedly to destroy the US economy.  Why can't we get a video of this guy with ISIS with his head removed?

Wed, 09/10/2014 - 11:57 | 5202030 maneco
maneco's picture

I think he always believed in the Austrian School but he did what his Masters wanted him to do. I met Ron Paul at the Mises Institute in 2002 and I asked him about Greenspan's 1966 essay about gold and economic freedom. Ron Paul said Greenspan signed a copy of the essay for him and Ron Paul said he asked him if he still believed in what he wrote and according to Ron Paul he said: "Absolutely".

http://www.constitution.org/mon/greenspan_gold.htm

Wed, 09/10/2014 - 11:52 | 5202036 Honey Badger
Honey Badger's picture

Would the real Alan Greenspan please stand up.

Wed, 09/10/2014 - 11:56 | 5202048 Joe Tierney
Joe Tierney's picture

9 reasons Alien Greenspam stinks:

 

1. Forgot to change his diapers again

2. Has Lox and Bagels breath

3. He's a toe-sucker

4. He shits his britches every time someone asks him about his role in architecting America's 2008 crash

5. He has some froth evident in all his orifices

6. His green shoots come from gangrene

7. His "New Economy" means wearing the same smelly diaper for 3 days

8. He's still spending most of his time inflating ass(et) bubbles these days

9. He marinates his fish in his armpits overnight before spreading it on his bagels in the morning

Wed, 09/10/2014 - 11:58 | 5202066 Squid Viscous
Squid Viscous's picture

you forgot: he was licking andrea mitchell's stinky rotting box

Wed, 09/10/2014 - 15:25 | 5203130 pupdog1
pupdog1's picture

Can't ... stop ... throwing ... up...

 

Wed, 09/10/2014 - 12:00 | 5202082 maskone909
maskone909's picture

dude number 9 was pretty damn foul! 

Wed, 09/10/2014 - 11:54 | 5202050 lasvegaspersona
lasvegaspersona's picture

Greenspan knows...but those who know don't (really) talk and those who talk don't (really) know.

Read his earlier (pre-Fed) comments about gold, rumor has it he is still OK with physical.

Wed, 09/10/2014 - 11:55 | 5202052 Downtoolong
Downtoolong's picture

Insurance, Greenspan said, is really nothing more than saving for a rainy day. And insurance, by its construction, is a major form of savings for this country.

Funny, I thought insurance was supposed to be about risk spreading in the 10% of all risk management activities where risk can actually be eliminated and not just transferred.

But, who am I to second guess a prior Fed mastermind?

If insurance is really nothing more than saving, I think I'll just cancel my life insurance policy and buy more gold for a rainy day.

 

Wed, 09/10/2014 - 12:36 | 5202265 detached.amusement
detached.amusement's picture

 out of all the WTFs in his writings up there, this one made me yell.

 

Insurance saving for a rainy day???  get that bull shit outta here.  insurance is companies making money off of others' lack of preparedness and that's it.

 

and of course now that its got the point of a gun behind it...

Wed, 09/10/2014 - 11:56 | 5202054 NaiLib
NaiLib's picture

He said one thing right: Lack of confidence. Of course, same guys that put the world in this mess are still running things. That's the problem. Same people same "solutions". There is only one solution left. Stop printing, let the bad companies, governments go bust, star over with a cleaned out balance sheet. That is what every citizen have to do, so should govs and comapnies dp too. Sure it will be a mess but after that it might be sustainable.

Wed, 09/10/2014 - 12:00 | 5202076 maskone909
maskone909's picture

thats a BOLD statement you made right there

Wed, 09/10/2014 - 12:10 | 5202145 TabakLover
TabakLover's picture

That would just start the cycle over again............  decades of pain followed by a century or so mindless delusion then right back where we are.  If you are/were lucky you got born somewhere early in the century or so of delusion.  This time around that seems to have been about 1930.  First 15 years were rough....but you was a kid.  Next 60 years not too bad.

Wed, 09/10/2014 - 12:43 | 5202297 gtb
gtb's picture

Not too bad...unless you were killed in Korea or Vietnam.  But your point is a good one.

Wed, 09/10/2014 - 11:57 | 5202059 venturen
venturen's picture

maybe printing $4 Trillion Dollar for criminal bankers and rescuing the same said criminals with unlimited guarantees and not prosecuting any of those criminals.... so they can ramp bonds, commodities, stock, and assets to improvise everyone else isn't a god idea! 

Wed, 09/10/2014 - 11:57 | 5202063 TabakLover
TabakLover's picture

10.  Coz Greenspan was Fed Chair for many years.

 

Guck Freenspan!

Wed, 09/10/2014 - 11:59 | 5202069 kchrisc
kchrisc's picture

"Alan Greenspan's Nine Reasons "Why The Economy Stinks"

Because you, and your Rothschild bankster masters, with the complicity of your government puppets, stole it--lock, stock and barrel.

See you on the guillotine, unless you can 'return,' flee, fast enough.

An American, not US subject.

Wed, 09/10/2014 - 11:58 | 5202072 Life of Illusion
Life of Illusion's picture

 

This is big, since most of the institutional lending in China has been backed by the government. There is a substantial amount of essentially shadow banking that operates with the same presumed backing of the government, but that backing is not really there, and the government is about to let some companies know that the hard way. Look for some Chinese defaults in the future, perhaps in its seriously overextended steel industry or elsewhere in tis manufacturing sectors.

 

Why not do same in USA ????????

Without cleaning and restructuring this economy goes nowhere.

 

Wed, 09/10/2014 - 12:00 | 5202087 localizer
localizer's picture

I just love when people like this come out and give smart advice on ANYTHING - they are directly responsible for the mess they create and then they come as if they had nothing to do with it and the ones running the show are being portrayed as idiots!

Most valuable one is this: A diminished U.S. military means an unstable world.

Wed, 09/10/2014 - 12:02 | 5202096 Perimetr
Perimetr's picture

Wait, he forgot one:

I SUPERVISED THE POLICIES AT THE FED THAT BROUGHT THIS ABOUT!

Wed, 09/10/2014 - 12:04 | 5202100 NoDebt
NoDebt's picture

And my responses (shooting straight from the hip):

9.  Confidence.  It's a bit tough to have confidence once you've seen the monetary magic trick a thousand times, know how it works and know you're ABSOLUTELY going to get creamed by it again if you make real world decisions based on illusory prosperity.

8.  Renting instead of buying.  Why would you buy with no job, no ability to qualify for a mortgage, the mountains of useless paperwork and, oh by the way, houses are still massively overvalued relative to incomes.

7.  It's a global problem.  Yeah, cause everyone did exactly the same thing we did.  Free money ponzi schemes are always a crowd pleaser.  At least on the way up.  YOU PERSONALLY were leading the charge.

6.  China's debt bubble is about to burst.  How the hell would you know?  You've been wrong about almost everything, now you're smarter than the room?  Fuck you.  I am smarter than you are, and I'm barely able to tie my shoelaces in the morning.

5.  Diminshed US military means a more unstable world.  Yeah, but it also means more money for entitlements, which are "growthy".  Just ask your good friend Paul Krugman.  And there's a shitload more to world stability than how many tanks and ships and missiles we have.  How is Putin able to turn Obama into his shine boy even though he's in an inferior position in the world and with fewer resources?  Answer that and you might learn something about world stability.

4.  Interest rates and inflation.  Another subject you know nothing about, as evidenced by your record at the helm of the Fed.

3.  Regulatory over-reach.  You only talk about Dodd-Frank.  Is that the only law you see as overreach?  Do you think it's the worst of the bunch?  I submit the EPA has done more to quash real growth than Dodd-Frank has to date.  Shit, Dodd-Frank has been largely beaten back by regulatory capture one issue at a time to the point I can't tell if ANY of it has been enacted in reality.  I also see no evidence of a robust banking system helping fuel real growth any more anyway.

2.  No real leadership.  Yes, and the sun usually rises every morning in the east.  Not exactly a revelation.

1.  Nobody appreciates insurance enough.  Huh?  You mean like Social Security?  Yeah, that's working out great.

 

In short, fuck you.  Now get off my lawn.

 

 

Wed, 09/10/2014 - 12:06 | 5202125 q99x2
q99x2's picture

Arrest Alan Greenspan before he dies. Don't let him get away.

Wed, 09/10/2014 - 12:09 | 5202133 stinkhammer
stinkhammer's picture
  1.  
    1.  
      1.  
        1. Ben Bernanke
        2. Barry Soertoro
        3. Janet Yellen
        4. Alan Greenspan
        5. Ben Bernanke
        6. Barry Soertoro
        7. Janet Yellen
        8. Ben Bernanke
        9. Alan Greenspan
Wed, 09/10/2014 - 12:08 | 5202136 cn13
cn13's picture

Alan Greenspan is one of the biggest traitors in American history.

He should be executed for the purposeful devaluation of the U.S. dollar.

That is an executable offense by law.  But since when did laws matter?

Laws are for the "little people". 

Wed, 09/10/2014 - 12:26 | 5202218 p00k1e
p00k1e's picture

Greenspan isn't an American, he's Israeli first. 

Wed, 09/10/2014 - 18:38 | 5204046 Monty Burns
Monty Burns's picture

That's the whole point. Same with all the dual citizens.

Wed, 09/10/2014 - 12:09 | 5202141 tongue.stan
tongue.stan's picture

Greedspan and The Krug on the same day! 

Whatcha tryin ta do, make my head explode, or sumptin?

"Honey, have you seen my nailgun lately? I know I left it around here somewhere."

Wed, 09/10/2014 - 12:10 | 5202146 Spungo
Spungo's picture

Greenspan might be evil, but he's not stupid. Him and Guidotti wrote the book on how fiat money destroys a country.

Wed, 09/10/2014 - 12:14 | 5202160 Doubleguns
Doubleguns's picture

"But when you have a one-party political system, there usually isn’t a whole lot of out-of-the-box thinking, which is precisely what China needs right now."

Yep we need to get rid of our one party Republicrate system too. Now that it has come down to no difference between the two supposed parties. They have simply become power hounds not caretakers of the country.  

Wed, 09/10/2014 - 12:16 | 5202166 BeetleBailey
BeetleBailey's picture

FUCK Greenspoo and whatever comes out of his lying maw...the fucker caused this shit....go diddle Andrea Twitchells nasty gash, you fucking banker pickle sucker!

Wed, 09/10/2014 - 12:20 | 5202187 foxenburg
foxenburg's picture

A very good speech by a bright guy, still playing with a full deck. Just because you personally screwed everything up doesn't mean that you don't realise what the problem is.

Wed, 09/10/2014 - 12:21 | 5202196 Bell's 2 hearted
Bell's 2 hearted's picture

"The rates are suppressed, Greenspan said, because the Federal Reserve has absorbed so many mortgage-backed securities and U.S. Treasuries."

 

Hardly.

 

Interest rates have been on a downward trend for 30 years.  Furthermore, if you have paid attention ... since the recession yields have actually dropped when Federal Reserve balance sheet neutral ... gone up when FR added to it.

 

Would luv to hear AG's thoughts when interest rates go lower ... much lower ... when QE stops ...

Wed, 09/10/2014 - 12:25 | 5202213 p00k1e
p00k1e's picture

Throw these 'dual citizens' out of America.

Wed, 09/10/2014 - 12:27 | 5202220 no more banksters
no more banksters's picture

"The paradox is that in the mid 90s, Greenspan had already realized that something was wrong with the economy, but ultimately convinced himself that computers were increasing the productivity in novel ways, too new to be detected in the data."

http://failedevolution.blogspot.gr/2012/07/the-illusion-of-self-regulati...

Wed, 09/10/2014 - 12:32 | 5202244 moneybots
moneybots's picture

“The whole structure of the industry is the mechanism by which you’re converting consumption into savings,” Greenspan said, “and the only way the economy can grow is to save.”

 

So what does the FED do?  Crush savers.

Wed, 09/10/2014 - 12:31 | 5202245 stutes33
stutes33's picture

Greeny, TIME IS UP.  Nobody cares.  Thanks for sharing!

Wed, 09/10/2014 - 12:39 | 5202272 AdvancingTime
AdvancingTime's picture

Sometimes the old guys who have seen it all have the most perspective and the guts to speak up because they have less to lose. What I like about numbers is that when they are not jockeyed, jerked around, and falsified they tend to tell the truth. Looking down the road the numbers do not work.

Allen H Meltzer is viewed by many economist as America’s foremost expert in monetary policy, Meltzer is the author of the three-volume “A History of the Federal Reserve.” For over 25 years he was the chair of the Shadow Open Market Committee, a group that meets regularly to discuss the policy of the Federal Reserve. “We’re in the biggest mess we’ve been in since the 1930s,” he recently stated. “We’ve never had a more problematic future.” More on his thoughts in the article below.

http://brucewilds.blogspot.com/2013/07/it-will-all-end-badly.html

Wed, 09/10/2014 - 12:50 | 5202287 pupdog1
pupdog1's picture

Isn't Greenspan the fucking douchebag that engineered the deregulation of giant banks so they could pursue trillions in toxic derivatives while stiffing John Q. Public with their gambling losses?

Today, the giant banks have ratios of interest rate-sensitive toxic derivatives exposure to stated assets ranging from 10-to-1 to 50-to-1.

And the banks' stated assets are fraud numbers, not mark-to-market, thanks to the feckless self-enriching whores of congress.

 

Wed, 09/10/2014 - 12:57 | 5202375 guasilas
guasilas's picture

A shorter 9point explanation:

G.R.E.E.N.S.P.A.N.

Wed, 09/10/2014 - 13:05 | 5202418 sainchaw
sainchaw's picture

hopefully he will go down as a loser in the history books


Wed, 09/10/2014 - 13:16 | 5202474 rejected
rejected's picture

This  insane 'elite ahole' like all the others shows just how out of touch he/they are. The unconstitutional Fed along with the unconstitutional gov have destroyed this nations money and with it the nation itself.

It doesn't take a rocket scientist to see the inmates are in control of the asylum. 1913 was the year America came down with Fedbola which at this point  the only cure is to reset. Add the citizen robbery amendment and the end of state representation the nails were driven in the coffin. A reset would require a resolute, educated, informed and independent minded population which means .............. it won't freakin happen.

Wed, 09/10/2014 - 13:21 | 5202508 Pumpkin
Pumpkin's picture

He even looks like an evil sack of shit.

Wed, 09/10/2014 - 14:16 | 5202805 yogibear
yogibear's picture

He's evil and his face looks like a sack of shit.

Wed, 09/10/2014 - 13:22 | 5202515 besnook
besnook's picture

didn't that nitwit jared bernstein say that the reserve status of the dollar was the reason the usa savings rate was so low? and now greenspan says savings leads to growth? which is it?

Wed, 09/10/2014 - 13:25 | 5202532 Zero Govt
Zero Govt's picture

''..where every time a bubble bursts another has to replace it..''

you've succintly and very efficiently pretty much summed up banking and the Feds entire economic strategy in 11 short words... who needs economists now

Wed, 09/10/2014 - 13:40 | 5202625 I Write Code
I Write Code's picture

He's nearly senile, he's been confused for twenty years, and he's been WRONG for thirty years.

The 2008 collapse is entirely his baby and his legacy.

He has no vision of the world as it is today or as it even was twenty years ago, his input buffer shut down forty to fifty years ago.  He don't grok globalization as it is today.  It's not in his textbook.  And he's never really been honest about it anyway.

Put him on his horse and buggy and head him back down to the farm.

Wed, 09/10/2014 - 14:18 | 5202816 basho
basho's picture

what a sad s.o.b.

with all the out-of-work comedians, they hired this senile fool.

Wed, 09/10/2014 - 14:31 | 5202879 limacon
limacon's picture

It's probably better to have him inside the tent pissing out, than outside the tent pissing in.” LBJ about Hoover .

 

Sadly , Greenspan was inside the tent pissing in .

Wed, 09/10/2014 - 18:34 | 5204030 Monty Burns
Monty Burns's picture

When will that fucking demon die and take his place in the 7th Circle of Hell?

Wed, 09/10/2014 - 16:02 | 5203331 sidiji
sidiji's picture

Guess what, Greenie responsible for all nine of them...i remember when he panicked slashed rates after the 2000 dot com burst...that caused the great housing bubble and the rest is history....Greenspan will go down in history as the jerk that destroyed the US economy...if there was any justice, he should be put up against the wall in front of a firing squad.

Wed, 09/10/2014 - 16:02 | 5203332 sidiji
sidiji's picture

Guess what, Greenie responsible for all nine of them...i remember when he panicked slashed rates after the 2000 dot com burst...that caused the great housing bubble and the rest is history....Greenspan will go down in history as the jerk that destroyed the US economy...if there was any justice, he should be put up against the wall in front of a firing squad.

Wed, 09/10/2014 - 19:36 | 5204219 datapanik
datapanik's picture

The Prime Stinker speaks - when the hell is this guy going to fall off his perch.

Thu, 09/11/2014 - 00:37 | 5205187 RichardParker
RichardParker's picture

Seems like The Fed totally forgot about how low interest rates totally crush the insurance industry. 

I'm guessing this asshole is going to push for some sort of subsidy/bailout for the insurance industry when he says "The insurance industry needs to thrive and to be given the support it needs to thrive..."  

http://online.wsj.com/articles/SB10001424052748704405704575596932278239578

 

 

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