Brother, Can You Spare a Trillion?
Greenspan's Financial Conflict of Interest
- Former Federal Reserve Chairman Alan Greenspan, at a Washington meeting of Brookings Papers on Economic Activity, implied that non-bubbles are worse than financial bubbles by asserting, "Fear as a driver, which is going on today, is far more potent than euphoria."
- He also claimed that today's market behavior is "identical" to 1987's behavior (when a rookie Greenspan slashed the benchmark Fed funds interest rate by more the double the usual 25-basis-point cut and began to earn his reputation for the "Greenspan put" to prop up the stock market).
- Both of Greenspan's arguments suggest that today's Federal Reserve should bailout the banks and Wall Street with more inflationary debt by cutting the benchmark Fed funds interest rate.
- Deutsche Bank would benefit significantly from a Fed bailout: "Deutsche Bank May Be Worst Hit by Rout, JPMorgan Says (Update3)" (Bloomberg).
- Greenspan works for Deutsche Bank: "Greenspan Hired as Consultant for Deutsche Bank" (MoneyNews).
- Greenspan owned assets of at least $4.2 million as of 2005.
2 comments:
The media is finally able to see through the halo that so illuminated any mention of Greenspan.. especially in the past 10 or so years.
More independent thinkers are seeing that he was the darling of Wall street because he always bailed them out.
1992 / 1997 / 2001.. all had series of rate cuts that propogated a series of asset bubbles.. from Stock market to Real estate.
Now Ben is stuck cleaning up his mess.. Lets see whether Ben can hold off and not cut interest rates just to appease the poor millionaires at Wall Street.
Tom,
Hello. I agree that Greenspan's reputation has diminished. I am not sure if Greenspan has lost his halo with the mainstream (yet) but Bernanke certainly has his date with destiny on September 18.
Thank you for the comment and please visit again.
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