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On This Day 18 Years Ago, Alan Greenspan Warns Of "Irrational Exuberance"
December 5th 1996: After rising 210% off the 1987 crash lows, Alan Greenspan speaking at the American Enterprise Institute in Washington, asks: "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?" The next day, the Dow Jones Industrial Average slumps by 1% to close at 6,381.94; over the next three years, the market nearly doubles...then crashes...then doubles... then crashes... and then triples in the last five years... "rational exuberance"
Charts: Bloomberg
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Everything is fixed now. Literally.
Everything is fixed... and everything is broken
stocks should be up....this transformation to the part time, $10/hour slave labor economy is going easier than expected
next target---remaining unions (except government)
You know you're screwed when it takes a stock market chart like that to simply breakeven against inflation over 20 years
Those days, banks used to pay 10% interest on deposits. Internet was picking up. Life was good. Better times were clearly ahead.
Then this:
http://www.wto.org/english/news_e/pres01_e/pr243_e.htm
Notice the date coincided nicely with the 'Pearl Harbor' of the War on Terror.
On Dec 5, 1996. I think I was fucking the bejezzus out of this Australian chick who kinda had a, cute, butterface, but definitely had a nice jeans ass.
I suppose I was 'irrationaly exhuberant' in that moment. (but I suppose have no regrets, so how bad can it all be?)
There's some good, old-fashioned doublespeak for you.
I used to watch Greenspan when he talked to congress and doublespeak doesn't even begin to cover the the line of bullshit he used and the senators just sat there nodding knowingly with their eyes completely glazed over.
Shriveled up out fucking raison, never had a clue of who he was and what he was doing.
Coming up with economic plans , playing with himself in the bath tub.
If the central banksters send down their best reps, then it is a sad day for all of us.
Probably why goldman ballsacks gives us free porn. SHould I say fuck you or thank you?
A single red rose to bankers all.
A single red rose to watch them fall.
The most astonishing thing is that central banks keep buying to this day, at ATH......
"At the beginning of last decade, when the towers of the World Trade Center collapsed during 9/11 attacks, the market suffered the biggest drop in history. Two weeks later, the “Enron” scandal revealed, and quickly became clear, that this was just the tip of the iceberg of a massive fraud from the corporations. Since the early 90s, many major companies were presenting fake profits, hiding their debts, with the help of the largest accounting firms. 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...
in the new normal, irrational is rational.
OT:
http://www.msn.com/en-us/news/us/phoenix-police-officer-shoots-dead-unar...
William Munny reaction: "He shoulda armed himself"
Yeah that first shot was great.
Bravo!
Hannibal Lecter needs to invite greenspan (and hag wife) over for dinner
Hannibal would end up with the runs...
Die already, Greedspan!
Why did nasa MC say us just drive a "golden spike" to cross a bridge with orion?
https://en.wikipedia.org/wiki/Golden_Spike_Company
One of my favorite videos. Buy and burn.
http://video.cnbc.com/gallery/?video=3000050025#.
What a mess these PhDs at the Fed create. From one big mess to a larger one.
Until the mother of all financial messes.
holy shit. i never saw that video.
So, Alan says it would have been better to destroy the homes on the market, in order to keep prices high, instead of letting the glut of homes bring down the prices.
Um. Alan. what happens when people can't afford to buy a home? What happens when people have to stretch financially in order to get into that home, and then get analized when the inevitable collapse comes? Alan, whose money is the government going to use to buy the homes in order to burn them? It will come from the people, after the government has borrowed from the FED in order to buy the houses that will be burnt down... tell me, why should the government borrow from YOU in order to destroy something of value... oh wait, that's right, your banker buddies need the prices to stay high, b/c they're holding the mortgages, AND, any home that is destroyed is going to be replaced by a NEW home loan. Looks like a win-win for the FED and its banker buddies.
Today's exuberance is Rational. In the sense that the US Government and it's puppet the Federal Reserve is totally committed to the "Wealth Effect" economic recovery model, which, in itself, implies Liquidity injections, money printing, zirp leverage costs and open index buying. So, never in American history has "Don't Fight The Fed" ever been so in play. Traders are exuberant because of the explicit guarantee by the Fed that stock prices will rise, and rise again. Fundamentals are no longer in play, Fed Money Printing to fund Liquidity floods, and the 0% cost of levering up to buy stocks. When all the Power That Be are committed to rising stocks, the reasons for "Rational Exuberance" is demonstrable.
Have you noticed the several times the Fed attempted to down play QE to begin a slight exit from QE? Tumbling share prices, and HOW FAST did the Fed jump back in and juice those share prices? This confirmed for the traders that the FED is ALL IN, to manipulate stocks, even to their proven Index Buying sprees, if that is what a rising market required. This can be demonstrated to be an example of "Pure Communism" for the 1%. They are the commissars of the "Wall-Street Soviet Of People's Bankers." Or as I call the US stock markets The "WSSPB".
+1,000 upvotes.
Only in a manipulated economy can exuberance ever be rational.
You say Greenspan and I say "ass clown".
... "Let's call the whole thing off."
And 18 years later,death approaching he is confessing gold will rise measurably.
Greenspan fooled soooo many people with his pseudo economics. To anyone that studied upper level economics in college would realize the guy was full of shit. As soon as you apply a algebraic formula to economics I've identified you as an "ass clown" or "fuck stick". Economics ain't that complicated and it's certainly NOT mysterious as Greenspan led the masses to believe. He was an excellent conman.
Greenspam made that comment back before his last reptillian molt, so you wouldn't hear anything like that from him today.
His hide is thicker than the hide on a Water Buffalo now.
After having that remark (which was true), and which he knew would send the market plunging, Greenspan (the personification a rectum's sphincter) did not raise margin requirements the next business day after the remark.
THEN AFTER GIVING THE DECLINE A WEEK OR TWO, GREENSPAN'S BANKSTER FRIENDS AND THE ASSORTED CROOKS HE WAS IN LEAGUE WITH....
BOUGHT
............THE
..................FUCKING
..........................................DIP
and rode the tech stocks to a pre-agreed price of NASDAQ 5000, 3 years later.
There they sold everything in sight.
Right, Greedspun "warned" of "irrational exuberence" - and then spent the rest of his tenure enabling it.
can you print the FED balance sheet next to that
"The next day, the Dow Jones Industrial Average slumps by 1% to close at 6,381.94; over the next three years, the market nearly doubles...then crashes...then doubles... then crashes... and then triples in the last five years..."
Imagine what the next crash will look like.
"The DJ Cyprus Total Market Index is at present down 99.71% from its all time high made in 2007, so we would say it is definitely the most oversold stock market in the world in all of history. From 100 euro invested at the peak, a mere 29 cents are left."
Time to go back to roots. Indebted servitude. And I do not mean in the service industry punching shit on a computer for 2 minutes a day and getting paid for 8 hours of work.