ROFL!!!! Now NAFTA is Greenspan's fault too! Jeez and I thought those tornado's last night in Illinois were caused by Al too.
U make a good point. But the problem is that the fed funds rate are not accomodtive. They are disctructive. Why did the Fed have to go so low to %1. Look how well companies are doing today.. growing 20%+ and the stock markets are on fire especially the small cap. He could of been more cautious and we could of came out of the recession albeit a less rampant recovery. At one point the DOW was %8 of its all time highs.. and the small cap indices are making new all time highs. I think its irrisponsible to keep them this low. The reason they are so low is mainly because of job issues.. but keeping rates low will not solve the core of the job problem.. its the outsourcing issue that needs to be tackled.. and it has nothing to do with interest rates. Thats where the Fed is wrong.. and it will cost us big time in the future. I think the Fed is totally wrong.. and has the wrong medicine for the big problem. --MIKE
Lets see, Greenspan has been Fed Chairman for 17 years and HOW long have we had ultra low rates? Two years, maybe. If you remember in early 2002 traders (who ultimately set prices) thought this was circa 1930. So it would have been sensible to have a RESTRICTIVE policy? Makes no sense Mecro. Housing bubble systematic of Greenspan's rate cuts? Maybe. Maybe not. How do I know housing is over priced. Dow 5000 seemed over priced relative to old valuations also. You ASSUME ipso facto that because housing is more expensive than it used to be that it MUST correct or burst. GLOBAL housing is ramping at the same % gains at U.S. prices. Does Greenspan have anything to do with the price of homes in Sydney or Rome?
The job issue is not Greenies fault.. Outsourcing is why we are having poor jobs.. keeping rates low will not solve this problem.. it will severely fix other problems.. but it totally ignores the core reasons for outsourcing. My point is.. his reasoning is wrong for keeping low rates. --MIKE
Mike IMO you can take it to the bank (no pun intended) that we're transitioning into a tightening cycle.
Most of us here have a hard enough time trying to figure out which way the market is heading...let alone the economy. I would say Greenspan has let his winners run and cut losers quickly. Everybody has some losers, especially during tough times. For the most part his P&L is in the black.
His paper P&L is in the black... he is averaging down on the US and will eventually get a margin call.
You will have to excuse the "idiocy" of our good friend Trend Fader. He is only happy when the Economy is in a Depression and he has a personal beef with Alan Greenspan because Alan's pumping of the Money Supply last Summer caused Trend Fader to lose all of his money shorting the IWM ( Russell-2000 ) all the way up! Oh, and by the way . . . Last time that I checked, Bush was in fact a "protectionist". Trend Fader appears mistaken on this point as well, and blames Bush for not doing anything about outsourcing. As for Alan Greenspan's role in our monetary policy . . . I couldn't agree more with Pabst on this. OPEC doesn't care where the fed funds rate is, and Greenspan has nothing to do with spiraling Health Care costs either! Yet, the Trend Fader's of the world believe that "growth" is a four-letter word. Pabst, make sure you take a look at Barron's this week. Interesting interview with Ned Davis about election year markets and how this will effect the second half of the year.
Listen to what the Fed said yesterdays and today. The main reason why he is keeping rates low is because we have no serious inflation and jobs are low. CPI is a joke.. and we are actually having rampant inflation paricularly in housing and outsourcing has nothing to do with low rates. My point is.. keeping the low rates is not gonna help our issues one bit.. it will only overheat what is already looking good.
With regards to the housing sector, you speak of inflation as if it is strictly driven by demand. What you fail to look at is the fact that there is a lack of supply as well, especially in areas like the San Francisco Bay area. Greenspan has nothing to do with the supply of housing. Get real.