Former Federal Reserve Chairman Alan Greenspan "raised eyebrows with several unusually frank remarks in an hourlong
discussion in front of 800 members of the Mass. Technology Leadership
Greenie told the audience that "Sarbanes-Oxley corporate governance rules enacted in 2002 had become a “nightmare” and should be scrapped as soon as possible." The former Fed head said SarbOx "discouraged risk-taking and were driving foreign companies to shun the New York Stock Exchange for the lighter rules in London."
That is a major reversal; Greenspan had previously supported the Sarbox.
Jim Bianco was none too impressed with the former Fed chief, noting:
"Anything else, Dr. Greenspan, you would like to change your opinion
on? Maybe the productivity miracle? The fallacy of using corporate visibility as
a forecasting tool? The quit rate? The world awaits your next confession at
–Jim Bianco of Bianco Research
Monday, September 25, 2006 – Updated: 11:41 PM EST
Et Tu, Greenspan?
September 27, 2006 9:17 a.m.
but he trained his successor well: election coming up? GOP on the defensive? flood the markets
Yes, or perhaps this Mr. Greenspan:
“American homeowners clearly like the certainty of fixed mortgage payments” but pay several thousands of dollars a year for the benefits.
Homeowners “might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade.”
If homeowners are “willing to manage their own interest-rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home.” – Feb. 24, 2004
From reading the Boston article, it seems link he raised some well-reasoned points in his speech.
What’s with the anti-Greenspan bitterness? He’s old and retired now anyway. What’s he got to do but reflect, correct, and provide his view of wisdom (which might, over the years, turn into senility)?
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.
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.”
[written in 1966]
willing to manage their own interest-rate risks
ha. that’s one great quote. maybe he could have advocated a checkbox on every mortgage ap — “Yes, yes, i checked off about my interest-rate risks, now gimme my money.”
All of this cheap money being thrown around can only do us all in. It saddens me to think that our once great nation is headed for a serious debt-driven reality check….but whoever survives it will be better off for it.
Some lessons have to be learned the hard way….and some of those have to be learned the hard way every other generation. I think history will label Greenspan as the great enabler, and the people of this time as all too willing to take advantage of his services.
Meanwhile those in the sane minority pay for the idiocy of their short-sighted neighbors.
If this action doesn’t feel like window dressing, then tomorrow will have me wake up next to Hillary Clinton off her estradiol medication.
Those of you watching the ticks in the futures know what I’m talking about. As the VIX slowly makes its way back down to 11, this is the textbook example of how an air pocket is created in the market.
And careful shorting here. We are amidst a melt-up window dressing market and the $TICK has not even hit 1200+ today.
When the buyers eventually succumb at $TICK 1200+ today, I’ll start to take the other side and gladly sell them shares.
Watching them walk the Dow up the 50 EMA on the 1 minute chart reminded me of Yeats.
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
Reminds me of that 8yr old dressing down a less well-tanned playmate with Whitey
Ok, Sherman you figure $150,000/hr is a bargain for this advice or a flabbergasting revelation of our own senility?
I’m sure the AIM in London is loving SOX because they are getting mucho IPOs as a result of US firms looking to avoid the SOX cluster f__k.
“The best lack all conviction, while the worst
Are full of passionate intensity.”
and the latter all have TV shows with Money in the title.
LOL and thanks for the Yeats!
This is so exciting watching bubblevision trot out expert after expert to assure the public the old dow record will be broken. I’m pretty sure they are in 100% agreement it is a sure thing. Hope Joe Sixpack uses what’s left of his MEW to participate in the follow through that is certain to follow in October. To the MOON, baby! I’m so excited I dug out my Y2K party hat and noisemaker. How fun.
i haven’t pulled the trigger on those lusty qqqq puts yet..but i think there is a potential to make a big gain in october..will wait another week though.
While Greenspan has had temporary delusional bouts, he has generally made some profound statements. Picked the bubble in 1997 and then delusionally changed his mind in 2000.
He’s right about Sarbox. And, just as we’ve done in history whenever we overreact, parts will be repealed in time. Bet my life on it.
Good economist change their stance when new information presents a credible, better alternative. No need to hack on a guy for changing his stance based on new information (i.e. watching SOX produce unintended results that are very costly).
Well, SOX’s consequences may or may not have been obvious at the time it was passed, but using his bully pulpit to get more Americans into ARMs at the times of multi-generational lows in interest rates!?? That was ether senile or morally criminal, and one did not need a PhD in economics to figure that one out right away.
Small Investor Chronicles
historybuff on housingpanic.blogspot.com had this. I thought every one here should know
“We will not have any more crashes in our time.”
– John Maynard Keynes in 1927
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
– E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
“There will be no interruption of our permanent prosperity.”
– Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928
“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment…and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”
– Calvin Coolidge December 4, 1928
“There may be a recession in stock prices, but not anything in the nature of a crash.”
– Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
– Irving Fisher, Ph.D. in economics, Oct. 17, 1929
“This crash is not going to have much effect on business.”
– Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929
“There will be no repetition of the break of yesterday… I have no fear of another comparable decline.”
– Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929
“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
– Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
– R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“Buying of sound, seasoned issues now will not be regretted”
– E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929
“Some pretty intelligent people are now buying stocks… Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
– R. W. McNeal, financial analyst in October 1929
“The decline is in paper values, not in tangible goods and services…America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.”
– Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929
“Hysteria has now disappeared from Wall Street.”
– The Times of London, November 2, 1929
“The Wall Street crash doesn’t mean that there will be any general or serious business depression… For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game… Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.”
– Business Week, November 2, 1929
“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation…”
– Harvard Economic Society (HES), November 2, 1929
“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”
– HES, November 10, 1929
“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
– Irving Fisher, Professor of Economics at Yale University, November 14, 1929
“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
– Paul Block (President of the Block newspaper chain), editorial, November 15, 1929
“Financial storm definitely passed.”
– Bernard Baruch, cablegram to Winston Churchill, November 15, 1929
“I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
– Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929
“I am convinced that through these measures we have reestablished confidence.”
– Herbert Hoover, December 1929
“[1930 will be] a splendid employment year.”
– U.S. Dept. of Labor, New Year’s Forecast, December 1929
“For the immediate future, at least, the outlook (stocks) is bright.”
– Irving Fisher, Ph.D. in Economics, in early 1930
“…there are indications that the severest phase of the recession is over…”
– Harvard Economic Society (HES) Jan 18, 1930
“There is nothing in the situation to be disturbed about.”
– Secretary of the Treasury Andrew Mellon, Feb 1930
“The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
– Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930
“… the outlook continues favorable…”
– HES Mar 29, 1930
“… the outlook is favorable…”
– HES Apr 19, 1930
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
– Herbert Hoover, President of the United States, May 1, 1930
“…by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent…”
– HES May 17, 1930
“Gentleman, you have come sixty days too late. The depression is over.”
– Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930
“… irregular and conflicting movements of business should soon give way to a sustained recovery…”
– HES June 28, 1930
“… the present depression has about spent its force…”
– HES, Aug 30, 1930
“We are now near the end of the declining phase of the depression.”
– HES Nov 15, 1930
“Stabilization at [present] levels is clearly possible.”
– HES Oct 31, 1931
“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”
– President F.D. Roosevelt, 1933
Bought 50 contracts of 133 SPY March ’07 Puts at 3.80. Wish me luck fellow Bears….. I will let you know how I make out.
“Wish me luck fellow Bears”
Funny! Thanks, I needed that.
desidude, thank you for that wonderful collection of quotes!