The Emperor Has No Clothes

Discussion in 'Politics' started by Babak, Aug 30, 2002.

  1. Babak

    Babak

    Below is from Greenspan's talk to a symposium of the Federal Reserve Bank of Kansas City in Jackson Hole:

    "The notion that a well-timed incremental tightening could have been calibrated to prevent the late 1990s bubble is almost surely an illusion," -- August 30th 2002

    "As events evolved, we recognised that, despite our deep suspicions, it was very difficult to definitively identify a bubble until after the fact." -- August 30th 2002


    Compare this with the following excerpts from the Federal Open Market Committee meetings:

    "When we moved on Feb 4, I think our expectation was that we would prick the bubble in the equity markets." -- March 22 1994

    "We let a lot of air out of the tire" -- April 18 1994

    "I think there's still a lot of bubble around; we have not completely eliminated it." -- May 17 1994

    "We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it." -- Sept. 24, 1996

    And the kicker:

    "The type of underlying conditions that create bubbles are very difficult to initiate in the housing market. It is not an issue on the table on the moment." -- July 17 2002