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发表于 19-9-2007 08:13 AM
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[size=180%]Tuesdays With Greenspan
[size=130%]AlanGreenspan launched his new book yesterday, perfectly timed. Its titledThe Age of Turbulence and has every biz commentator trying to get asoundbite on it.
[size=130%]An excerpt from the book, “The great problem inherent in capitalism [is] that creative destruction is often, and by a great many, viewed[size=130%]simply as destruction. Capitalism creates a tug-of-war within each ofus. We are alternately the aggressive entrepreneur and the couchpotato, who subliminally prefers the lessened competitive stress of aneconomy where all participants have equal incomes,” Greenspan writes.
[size=130%]TheWall Street Journal asked Greenspan “Many people, including some formercolleagues of yours from that period, believe the Fed kept interestrates too low for too long, thereby contributing to the housing bubbleand problems in subprime mortgages. Do you agree?” Greenspan agreeswith the “too low, too long” charge. “Wekept them too low for too long because we were effectively creating aninsurance against [deflation]. The problem in making choices is thatyou recognize that if you miss, you can end up with interest rates toolow, too long,” he replies.
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As part of Greenspan's book contract, I think he has to go to all the interviews and tv shows to talk about his book.
[size=130%]Greenspansays basically that his critics under-estimate the dangers to thebanking system and the broader economy in the early years of thisdecade, in trying to justify his keeping interest rates so low for solong. Greenspan raised rates in 2004. But only after he held interestrates at historically low level for three years, while the bubble, thehousing bubble was forming. That was the growing perception in tradingrooms nowadays - that Greenspan was largely the unwitting architect forthe current subprime mess. And during that 3 years Greenspan made 13rate cuts in that period of time. "Itwas our job to unfreeze the American banking system if we wanted theeconomy to function. This required that we keep rates modestly low," Greenspan says.
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[size=130%]In an interview with The Financial Times, [size=130%]Greenspanmakes lots of inflation hawkish noises and notes that he weighs thedata differently from those such as economist Martin Feldstein who havecalled for aggressive rate cuts. “You have got to be a lot more careful in lowering rates in response to crises, ” he says. Greenspan also makes some bleak[size=130%] predictions about the US housing market[size=130%],telling the FT that the downturn is likely to be worse than manyexpect. Greenspan said he would expect ‘as a minimum, largesingle-digit’ percentage declines in US house prices from peak totrough and added that he would not be surprised if the fall was ‘indouble digits'.
[size=130%]Asif this was a conspiracy by all media to try and help Greenspan sellhis book, Newsweek is putting Greenspan on their cover this week. Thisis bigger than Harry Potter's next movie!!! [size=130%]Greenspan's views on the “moral hazard/bailout/subsidy” question about Fed cuts - “Tothe extent that [the Fed] interferes with the economy, we do help someof the people who are involved in rather questionable financialactivities. The problem basically is that if you do effective monetarypolicy and stabilize the economy, you will raise all asset prices—thosethat are assets owned by prudent investors, but also the prices ofassets of those who have taken very silly risks and should be punishedas a consequence. There is no simple solution. If we do something whichworks for the society as a whole, we will inadvertently and undesirablybail out, if you want to put it in those terms, the people who havetaken silly risks,” This is the one big contention amongall investors, should the Fed step in to bail out less-than-prudentinvestment decisions made by some? To take the narrow road and sayeveryone should bear the risks and consequences of their actions ismyopic and unwise. Take LTCM, should the Fed not have bailed them?That's because the consequences of leaving them to act out theconsequences brings about far greater damage to the global economy,which may result in some nations losing tons in wealth and may find itnear impossible to recover. Should all Asian nations be left to die andunwind on its own following the 97 crisis?? After all, it is Asia'sproblems right?
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[size=130%]Bykeeping interest rates too low for too long, Greenspan encouraged aborrowing-fueled speculative binge, which has now given way to a creditsqueeze. But his greatest failing was towards the end of his reignwhere he failed to crack down on the mortgage industry, he allowedsubprime hawkers to peddle dubious loans.
[size=130%]So,would I go and buy his book, probably not. I have read books about himand by him before and never came away knowing much more. Its justamazing the way the media & investors alike would put Greenspan ona pedestal, and for what? Basically he made a career in a job whosemain responsibility is to pick (a), (b) or (c). The first being tolower rates, the second to raise rates, and the third to do nothing. Ifyou are really unconvinced, just do (c). If people keep pestering youone way or the other, just follow the tide.
[size=130%]The reputable Bob Woodward in the Washington Post probably summed up best when he said "[size=130%]AsI've said many times before, the Federal Reserve is far less importantthan most people realize. I think the fact that it's so secretive helpskeep the illusion alive,”.
取自：Malaysia-Finance Blogspot
http://malaysiafinance.blogspot.com/
[ 本帖最后由 hijaak 于 19-9-2007 08:16 AM 编辑 ] |
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