No, just everyone on this site playing armchair economist again. These threads are all alike: 1. Insult/praise political or economical figure. 2. Argue how you could/couldn't have done it better. 3. Other users argue the other side of the coin. 4. Insert the occasional insult and profanity 5. Rinse and repeat.
Neither of these is right. Read one of the stories on the wealth effect from then. You can search that cover story Restating The Nineties in Business Week. Employees were huge winners. I'm an employer too. The late nineties were a GREAT time for me and for my empoyees. So far, in this deacde, it has not been good for me or my employees. Would like to hear what any other employers think on this. He's totally right on the ARMs too. The context he said it in was look back. Fixed, which everyone was in, was NOT a good choice. ARM was. And few people choosed them. As for current ARM book - too soon to say. Change dates for the bulk of them still a year out anyway. Geo.
Only one year after that he is now sounding alarms at ARM, IO, Optional ARM, etc, like craze. The fact that he is the best story teller is evident in that so many people became fancinated by his fair tales, but he has to reverse them so often that these fair tales become nightmares.
Batra is a perma-crisis sort. His best known work was The Great Depression of 1990. Better idea would have been The Buying Opportunity of a Lifetime. Perhaps Batra's grudge against Greenspan is rooted in the reality that largely because of Greenspan, Batra's wildest scenario's never came to fruition.
Yes, a bit of debate, sometimes getting spicy. So what? IvanoBitch, you need to get a life. I do exactly as I want. I don't visit a thread if I don't want to and I don't visit Elitetrader if I don't want to. Try being an adult.
The problem is one of almost Orwellian proportion. In this world of omnipresent Government/media, with it's televised Senate banking committee hearings and glasnost like Fed transparency, the Federal Reserve Chairman has been morphed into The People's Minister of National Economist. Commenting on every global monetary implication, opining on the effects of Congressional fiscal policy, becoming the "go-to" guy on Social Security funding: all of these things have expanded the Chairman's role to a point where there's become a disconnect between the Fed's TRUE role and the expectation of a Nanny state "managed economy." The traditional role of the Fed Board of Governors is simple yet VERY crucial. Preserve the viability, health, and integrity of the nation's banking system. Period. That's why I LMFAO when someone comes on ET posting how Greenspan is nothing more than a puppet of the banking system. Well.... it's his frigging job!! What isn't his job or concern? For starters Fed policy can't be dependant on the greed or stupidity of consumers or investors. Think of how ridiculous the arm chair quarterbacking has become. Half the world thinks the tech bubble occurred because of accommodative rates in 1998-1999. The other half thinks the bubble burst because of restrictive policy in 2000-2001. Let me clue the trading community into a dirty little secret. When you buy, someone else is selling. And unless you prefer trading in a ZERO volatility environment, SOMEONE is going to lose. Greenspan has handled the monetary part of his job (his ONLY TRUE OBLIGATION) with aplomb. He eased in response to Asia/Russia/LTCM and mitigated what were UGLY stock declines in Octs 97 and 98. He WARNED of "irrational exuberance" while being open enough to recognize that changing productivity gains were helpful in supporting higher equity valuations. Keep in mind the market is STILL higher than it was when those eases began. In 2000 as the market came off it's highs he waited. He knew that a preemptive response to an emerging recession would be like putting out a fire with gasoline if liquidity injections came with the markets just off their highs. So instead by 2001 he orchestrated two years worth of DRAMATIC stimulus to bring the markets out of freefall. In the past year and a half as housing and stocks have risen appreciably he's tried to stabilize the situation by RAISING rates and at the same time keeping the all important long end of the Treasury yield curve at competitive spreads to Fed Funds. Just because people mis-time investments. Just because folks overborrow, is not a grave concern. Those events will ALWAYS happen. It's life. What I care about is knowing that my bank won't be on Holiday with a sign on the door saying "Sorry we're closed due to lack of funds. Go call the FDIC."
All right. We'll agree to disagree. So let's do this - anyone here that has it in for him, tell us something big he did policy wise and what he should have done instead. BTW, on that ARM thing, I remember borrowing some residential $ in early/mid 98 I think. I was good friends with a mtg broker. He shopped hard and bought two loans at his wholesale cost from Countrywide - one for me, one for him. They were dirt cheap, much better than public could get - 6.00 or 6.25 fixed I think. We were the pros that got a better deal than the rest, right? Nope. We were dopes with the rest of the borrowers. Not once did we think of getting an ARM. It was that period and thereafter AG was referring to I think. Another thing. I have no economics training but I'm wondering if the so-called ARM crunch the screechers are touting might not be as bad as they think when the first big arm change dates hit due to there being so many more entities lending and so much more money to lend. Could competition in lending keep rates low? Has it already? Geo.
a debate involves reasonable discourse about something. a rant is what some apparently deluded wannabes are posting about Greenspan. As if they even had a clue what his job is and/or the tiniest fraction of how to do it, let alone how he has to do it.
trade-ya1 - the name of the game is consistency. There are strong arguments that rates in the US have been too low for too long. Why is the Fed pulling out the "flexible, adaptive economy" argument now but they didn't use it during the Asian crisis (rate cuts), NASDAQ pop (rate cuts) or Sep11 (rate cuts)? The Fed hasn't been consistent and they have fuelled excess - the big night out will result in a hangover. The good news is that the rest of the world is being more responsible so it wont be the end of the fun for markets when the party is over.