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EJ
11-20-06, 05:29 PM
Greenspan Legacy Submits to Its First Review: Caroline Baum (http://www.bloomberg.com/apps/news?pid=20601039&sid=aDUxuva84q5I)
November 20, 2006 (Caroline Baum - Bloomberg)

Alan Greenspan didn't go quietly from the global stage when he retired as chairman of the Federal Reserve in January. His speeches are still widely reported, his economic views and forecasts instantly disseminated.

It would probably be better if they weren't.

His latest "forecast"–that the worst of the housing slump is over–was rudely challenged Friday when the Commerce Department said October housing starts plunged 14.6 percent from the prior month to a six-year low. Starts were down 27.4 percent in October from a year earlier; single-family starts have fallen by more than a third since the start of the year. Housing permits declined for the ninth consecutive month, a record.

Having presided over the late 1990s stock-market bubble, and having cut interest rates aggressively to clean up the mess when it burst, Greenspan has a vested interest in the health of the housing market. If the residential real-estate boom ends badly, as all bubbles do, he could go down in history as a "DBCB," or double-bubble central banker.

AntiSpin: Caroline, long a hero here at iTulip, let's Big Al have it with both barrels. (Thanks Pat for the link.) Ever since iTulip opened shop in 1998, I've been on Big Als' case, in the circa 1998 FAQ (http://www.itulip.com/faq.htm) uttering the heresy: "While I respect his profound intelligence, his history suggests a man who has a personality trait that is a serious hazard for a central bank chairman: he wants to be liked. Volker, for example, didn't have that problem. Right now he's enjoying a reputation as the smartest central banker in history. But he's making nearly the same mistakes as his predecessors in the 1920s, providing too much liquidity at the wrong time, fueling a speculative mania during a time of rapid technological innovation. What will be learned from this -- again -- is that the Fed's rate and money supply moves can distort the market's utilization of capital, leading to credit and asset value excesses and potentially a bust. Greenspan may not go down in history as a hero."

We "interview" him (http://www.itulip.com/aginterview.htm) a few months later and April 1 this year, seven years later, in Greenspan Says, "Sorry! (http://www.itulip.com/greenspanissorry.htm) joke about an eventual, unlikely apology.

The 1998 iTulip FAQ also says: "Greenspan said in one of his speeches that investors buy Internet stocks the way they buy lottery tickets. But the analogy breaks down when you consider that these Internet lottery tickets go for hundreds of dollars and the industry that's grown around the business of selling Internet stocks is not as well regulated as the state lottery industry, which has to explain the odds on each ticket they sell. On the contrary, reputable stock brokerages push day trading of Internet stocks as a road to quick riches. Equity analysts put absurd price targets and positively biased recommendations on stocks of companies their employers have backed. Most investors as a result are spending money on Internet stocks carelessly and they're going to lose a lot of money."

Same goes for the bubble to end all bubbles, the housing bubble. Except the housing bubble is far more unconscionable; most of the participants are unwitting: we all have to live somewhere.

Shame on you, Alan Greenspan. May live to see yourself go down in history as one of the biggest goats in central banking.

Rajiv
11-21-06, 11:29 PM
A good article in Counterpunch. (http://counterpunch.org/)

Alan Greenspan, Homewrecker
Housing Bubble Smack-Down (http://counterpunch.org/whitney11202006.html) by Mike Whitney

spunky
11-22-06, 04:10 AM
Yea, Vodoo Al stuck it to us, but it is up to americans to become financially savvy . Voting the "bums " out is not enough. If you expect the gov to protect you and look out for you-- ha ha ha. Kinda what this wonderful website is all about :D Did I vote Al in office ?????