Free Republic

Last week Meredith Whitney declared that the government is out of bullets, and now Alan Greenspan is saying the same thing about his old place of employment, The Fed. Reuters: The U.S. Federal Reserve has done all it can do to reduce unemployment and needs to worry more about the risk of inflation from the stimulus it poured into the economy, former Fed Chairman Alan Greenspan said on Sunday. "I think the Fed has done an extraordinary job and it's done a huge amount (to bolster employment). There's just so much monetary policy and the central bank can do. And...

Monetary Policy and Structural Reform of the Japanese Economy --Speech given by Eiko Shinotsuka, Member of the Policy Board of the Bank of Japan, at the Meeting on Economic and Financial Matters in Nagano on February 4, 2000 April 25, 2000 Bank of Japan [Contents] I. Introduction II. The Zero Interest Rate Policy A. What Is a Zero Interest Rate Policy? B. What Does the Phrase "Until Deflationary Concern Has Been Dispelled" Mean? C. Personal View on the Zero Interest Rate Policy III. Structural Reform of the Japanese Economy A. Information Technology Revolution B. Employment Problems I. Introduction1 It is...

Former Federal Reserve chairman Alan Greenspan and Paul Volcker wrote the House Financial Services Committee earliy this month that they opposed a provision, backed by Rep. Ron Paul (R., Texas) that would expand the congressional Government Accountability Office’s audits of the Fed. The committee, ignoring the pleas from the two, endorsed the provision Thursday. Greenspan and Volcker, in a letter sent to the committee’s chairman and ranking Republicans, warned that the provision threatened the ability of the Fed to foster price stability independent of political interference.

I was joking with the pops the other day that if I could somehow fit a lump of coal underneath the Old Lady that we could get a diamond in about a week's time. Speaking of diamonds, the federal government is pulling perhaps a prank on us bigger than I (Hank) ever could. The best part of it? We don't even know it's happening. Continue to full blog...

Frontline PBS TV program on Greenspan; mentioned Alan Greenspan as student of Ayn Rand...Thots.

William White predicted the approaching financial crisis years before 2007's subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy. William White had a pretty clear idea of what he wanted to do with his life after shedding his pinstriped suit and entering retirement. White, a Canadian, worked for various central banks for 39 years, most recently serving as chief economist for the central bank for all central bankers, the Bank for International Settlements (BIS), headquartered in Basel, Switzerland. Then, after 15 years in the world's most secretive...

Alan Greenspan, the former chairman of the Federal Reserve board, said on Sunday that the latest job report showing the nation’s unemployment at 9.8 percent was “pretty awful” and said he expected the figure to climb even higher. “My own suspicion is that we’re going to penetrate the 10 percent barrier and stay there for a while before we start down,” he said in an appearance on “This Week With George Stephanopoulos” on ABC. He said he was particularly concerned about data in the employment report, released Friday, indicating that an increasing number of Americans have been unemployed for more...

In an interview with Bloomberg yesterday, former Federal Reserve Chairman Alan Greenspan warned about possible future inflation and higher taxes as consequences for the unprecedented deficit spending taking place in the United States.

INTERNATIONAL. Legendary global investor and chairman of Singapore- based Rogers Holdings, Jim Rogers said the Fed and the US Treasury should have let 10 banks fail, not just Lehman Brothers, for the financial system to clean itself up. Speaking to CNBC Wordwide Exchange today Rogers said "All the government officials and bureaucrats loved the fact Lehman failed, because they could all jump in and support banks." "This whole problem was not caused by Lehman Brothers or Lehman Brothers failure. Lehman was an effect not a cause." "The real problem over the past 10-15 years has been that regulators have not...

The president will nominate again Ben Bernanke to be Federal Reserve chair. It's a story that will get a little coverage and even less analysis. Most people will nod and move on their way. Just think about that for a minute. The Fed chairman controls the money supply in the country and by extension the world, and this story will get little mention and even less analysis. The Federal Reserve chairperson is arguably the most powerful person in the world and yet the dynamics by which they are nominated and nominated again receives less attention than a story on Brittney...

In the late 1970s, as the federal government arranged to bail out Chrysler, not-yet-famous economist Alan Greenspan warned the problem “was not that it would fail, but that it would succeed.” And it did, thus paving the way for more bailouts, including (again) Chrysler. But the first Chrysler bailout was just one company, one time. The rolling series of financial bailouts over the past year -- Fannie Mae and Freddie Mac, AIG and Citibank, General Motors and Chrysler, etc. -- have not yet succeeded or failed. But they’ve raised a new moral hazard. These days, having invested so much in...

The economic position that the United States is now in is the result of a series of economic bubbles. To explain the nature of bubbles, I'm going to start by talking about their history; I'm not going to go all the way back to Tulip Mania and John Law, but I do want to mention some things from the Roaring Twenties that might sound familiar to us today. Over the eight-year period of that boom, the money supply increased by 62 percent. All kinds of new appliances and gadgets were sold: refrigerators, phonographs, electric irons, toasters, and vacuum cleaners. Many...

Tim Geithner and Alan Greenspan were on ABC's This Week this morning; both talked about the need to bring down the federal deficit, which is soaring to unprecedented levels under President Obama. Here is George Stephanopoulos's exchange with Geithner: GEITHNER: ... Remember the critical thing is people understand that when we have recovery established, led by the private sector, and we have to bring these down, deficits down very dramatically. We have to bring them down to a level where the amount we're borrowing from the world is stable at a reasonable level. And that's going to require some very...

The Talk Shows Sunday, August 2nd, 2009 Guests to be interviewed today on major television talk shows: FOX NEWS SUNDAY (Fox Network): Rep. Charlie Rangel, D-N.Y.; Sen. Jim DeMint, R-S.C.; Rep. Mike Pence, R-Ind. MEET THE PRESS (NBC): Lawrence Summers, director of the National Economic Council.; former Reps. Harold Ford Jr., D-Tenn., and J.C. Watts, R-Okla.FACE THE NATION (CBS): Summers.THIS WEEK (ABC): Treasury Secretary Timothy Geithner; former Federal Reserve Chairman Alan Greenspan (Michelle Malkin on Roundtable).STATE OF THE UNION (CNN): Sen. John McCain, R-Ariz; Christina Romer, head of the Council of Economic Advisers.

Alan Greenspan, the former longtime chairman of the Federal Reserve, said President Obama’s promise of a deficit neutral health care bill is an inadequate solution to dealing with a growing deficit due in large part to the cost of Medicare. “We have to attack both the original shortfall and make sure we fund whatever new initiatives occur in the health care area,” Greenspan said in an interview on ABC’s “This Week.” “It’s not adequate to be strictly revenue neutral because there’s a lot more to be done.” Greenspan said the health care reform plans that are currently on the table...

A trio of regulatory changes and missteps on the former president's watch let the banks run wild and encouraged the housing bubble. But he had help, of course. On Wall Street and Main Street they call William Jefferson Clinton the "Comeback Kid," but it's not because of some Election Day surprise. It's because almost everything he did regarding financial-services regulation has come back to haunt us. If it wasn't apparent before, the former president's handiwork became clear when President Barack Obama announced his plans for sweeping financial-services reforms. Obama's efforts to bring fair dealing to the mortgage markets, rules to...

Last Monday evening, Lew Rockwell, from a tip by someone named "Travis," posted this damning quote of Paul Krugman's from a 2002 New York Times editorial: "To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." Krugman. 2002. Calling for a housing bubble. What's more, by explicitly calling for a new bubble to replace the recently burst one, he anticipated by 6 years the Onion's hilarious "report" that "demand for a new investment bubble began months ago, when the subprime mortgage bubble...

When, during the invasion of Iraq, the United States Government issued its famous deck of playing cards with the 52 arch villains of the Iraqi police state, Saddam Hussein's face adorned the Ace of Spades. If the Obama Administration wanted to engage in a similar public relations campaign for the real estate crisis, the top card should be reserved for Alan Greenspan. Yet in a speech this Tuesday before the National Association of Realtors, Sir Alan "the-bubble-blower" claimed that his low interest rate policies in the early and middle years of this decade had no effect on mortgage rates or...

Greenspan sees "seeds of bottoming" for U.S. housing Tue May 12, 3:34 pm ET WASHINGTON (Reuters) – Former Federal Reserve Chairman Alan Greenspan said on Tuesday that "the seeds of a bottoming" in plunging U.S. home markets were becoming visible. Speaking to a National Association of Realtors summit, Greenspan said there were reasons to believe that bulging inventories of unsold homes were dwindling and that should bring some stability to prices.

Investors watching the recent rally may think that the Fed has saved the day, but its approach is fraught with danger. There's a lot of finger-pointing going on over who's to blame for the financial crisis: bankers, derivatives traders and the regulators who failed to keep an eye on them. Let me add two names that usually escape the dragnet: Fed Chairman Ben S. Bernanke and his predecessor, Alan Greenspan. Rather than confess and repent, the folks in Washington are running the recovery plan with the same misguided prescriptions: more government spending, more government regulation and a fivefold increase in...

WASHINGTON - Congress should enact "badly needed" immigration reforms to bring in both unskilled and skilled foreign workers if it wants to maintain the nation's economic vitality, former Federal Reserve chief Alan Greenspan said Thursday. Greenspan called for both a temporary worker program for low-skilled jobs and for an increase in visas for highly skilled workers...in testimony at the first Senate hearing this year on the prospects of an immigration overhaul. Noting the "very large participation" of undocumented workers in both low- and high-skilled jobs, he said, "if you were to remove either of those groups, the economy would be...

WASHINGTON -- Former Federal Reserve Chairman Alan Greenspan said Thursday that increasing skilled foreign workers in the U.S. could mollify housing-price declines that have caused "the plunge in the value of the vast quantity of U.S. mortgage-based securities." Mr. Greenspan said a separate group of workers, illegal immigrants, have made a "significant contribution" to the country's economic growth. He called for a temporary-worker program that could make use of that work force in a legal fashion. "Unauthorized immigrants serve as a flexible component of our work force, often a safety valve when demand is pressing and among the first to...

It's become conventional wisdom that Alan Greenspan's Federal Reserve was responsible for the housing crisis. Virtually every commentator who blames Mr. Greenspan points to the low interest rates during his last few years at the Fed. [Commentary] Martin Kozlowski The link seems obvious. Everyone knows that the Fed can drive interest rates lower by pumping more money into the economy, right? Well, yes. But it doesn't follow that that's why interest rates were so low in the early 2000s. Other factors affect interest rates too. In particular, a sudden increase in savings will drive down interest rates. And such a...

LONDON (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan recommends graduated capital requirements for banks to cut back their size. "New regulatory challenges arise because of the recently proven fact that some financial institutions have become too big to fail as their failure would raise systemic concerns," .. ... Greenspan is widely blamed for allowing financial firms to outgrow government oversight and ... acknowledged that he was partly wrong to resist the regulation of some securities. .. while regulators could enforce collateral requirements, they could not fully forecast if, for example, sub-prime mortgages would turn toxic.

Mr. Greenspan’s legacy may ultimately rest on a more deeply embedded and much less scrutinized phenomenon: the spectacular boom and calamitous bust in derivatives trading.[snip] “Proposals to bring even minimalist regulation were basically rebuffed by Greenspan and various people in the Treasury,” recalled Alan S. Blinder, a former Federal Reserve board member and an economist at Princeton University. “I think of him as consistently cheerleading on derivatives.”[snip] Robert E. Rubin, the Treasury secretary then. Treasury lawyers concluded that merely discussing new rules threatened the derivatives market [snip] In early 1998, Mr. Rubin’s deputy, Lawrence H. Summers, called Ms. Born* and...

Over the past ten days, as the furor over AIG retention plan bonuses has focused on Sen. Chris Dodd and Secretary of the Treasury Timothy Geithner, the White House has undertaken a PR offensive to protect the highest ranking Obama Administration official who was involved in the House and Senate negotiations over the stimulus bill, in which the AIG waiver language was inserted. "Right now, you get the feeling this is all about protecting [White House Chief of Staff] Rahm Emanuel,” says a former Treasury Department lawyer, who worked in that department's counsel's office on the Troubled Asset Relief Program...

WASHINGTON (MarketWatch) -- U.S. Treasury Secretary Timothy Geithner will on Monday provide details about the government's latest plan to help rid banks of toxic assets clogging the financial system. The Treasury Department said in a press release that it will hold the briefing at 8:45 a.m. EDT on Monday. The Treasury Department's program involves setting up a new investment fund to buy mortgage-related securities and other assets weighing down bank balance sheets. The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending. The Wall Street Journal...

We are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s. It will eventually subside and pass into history. But how the interacting and reinforcing causes and effects of this severe contraction are interpreted will shape the reconfiguration of our currently disabled global financial system. There are at least two broad and competing explanations of the origins of this crisis. The first is that the "easy money" policies of the Federal Reserve produced the U.S. housing bubble that is at the core of today's financial mess. The second, and far more...

Congressional Democrats Bankrupted the Nation *snip* The End In April 2001, before the events of 9/11 and just after entering the White House, President Bush began signaling warnings to members of congress that both Fannie and Freddie were headed into deep treacherous waters which could cause “strong repercussions in financial markets.” In early 2003, the Bush White House upgraded its warnings to “a systemic risk that could extend well beyond just the housing markets.” On September 10, 2003, Bush Treasury Secretary John Snow testified in congress that something had to be done to confront the growing storm at Fannie and...

Irrational Exuberance? We Are Now Below It . . . By Barry Ritholtz - March 2nd, 2009, 8:00PM On December 5, 1996, Alan Greenspan gave his famous Irrational Exuberance speech. At the time, the S&P500 was at 744.38. It blew through that number today, closing at 700. We’re still 350 points above the Dow’s closing price of 6,437.10; The Nasdaq is a stone’s throw (22 points) from its closing price of 1,300.12. In other words, the SPX is now lower than when Greenie gave his infamous speech 3 years ago, and the other indices are just above their levels when...

1995 Dec 19 -1/4 5 1/2 Jul 6 -1/4 5 3/4 Feb 1 +1/2 5 1/4 +1/2 6 1994 Nov 15 +3/4 4 3/4 +3/4 5 1/2 Aug 16 +1/2 4 +1/2 4 3/4 May 17 +1/2 3 +1/2 4 1/4 Apr 18 +1/4 3 3/4 Mar 22 +1/4 3 1/2 Feb 4 +1/4 3 1/4 1993 No changes

Excerpts from a 4 part New York Times article intended to lay the total blame for the financial collapse on Alan Greenspan, Phil Gramm and deregulation, but what it really does is show that the government is filled with crooks and is totally incompetent regarding running the economy. The sooner control is wrested from government's corrupt hands the better. Taking Hard New Look at a Greenspan Legacy Excerpt from part 3: In 1997, the Commodity Futures Trading Commission, a federal agency that regulates options and futures trading, began exploring derivatives regulation. The commission, then led by a lawyer named Brooksley...

Nationalizing troubled banks may be the only answer By Kevin G. Hall -McClatchy Newspapers WASHINGTON — Former Federal Reserve Chairman Alan Greenspan thinks it's necessary. His successor, Ben Bernanke, doesn't rule it out. From editorial pages to the blogosphere to boardrooms, this is the question on many minds: Should the United States nationalize some banks? A few months ago, it would have been heretical to suggest that Bank of America could become Bank Owned by America. Now, however, the U.S. economy is sinking faster than anyone thought possible, and respected economic authorities are suggesting that temporary bank nationalization, once the...

Former Fed Chairman and longtime free-market icon Alan Greenspan now says nationalization of U.S. banks might be the “least bad” way forward in the ongoing financial system collapse. In making the comment, Greenspan joined Republican Senator Lindsay Graham (R-SC), a member of the Senate Banking Committee, in testing the waters for support of the idea of letting government simply take over failing banks. Germany also this week cleared the way for bank nationalization as a last resort. “It may be necessary to temporarily nationalize some banks in order to facilitate a swift and orderly restructuring,” Greenspan told the Financial Times...

A former Wall Street Journal writer dissects why business reporters bought the bull—and missed the biggest story on their beat. for casual readers of business coverage—that is, most of us—the past 18 months have been a crash course in things we never knew existed but that, we are told, have already done us all irreparable harm. Not only are the problems catastrophic, goes the somewhat frustrating message, but it is already too late to do anything about them—other, that is, than pay for them. In looking back on how we got here, the business press assumes a tone of rueful...

Is China Pulling an Alan Greenspan? Some very interesting data out of China of late in terms of loan growth - in fact staggering data. Aside from being a very important economy to follow, it is worthwhile to dispel much of the bunk and hype coming from the punditry with reality checks. [Feb 9: China and the Baltic Dry Index - What is Really Going On?] Remember, 40%+ of this economy is export driven, and all Chinese customers are simply falling off a cliff; the largest economies of the U.S., Europe, and Japan are simply free falling. Japan's economy slumped...

Pop goes Easy Al's bubble By Ikeonic ...and now consumers are beginning to switch from irrationally exuberant speculators to savers and debt payers.What does this have to do with Alan Greenspan? Allow me to explain.From CnnMoney.com:The savings rate, as calculated by the Commerce Department, hit 3.6% in December. ... Until the economic upheaval of the past year, the savings rate was at historic lows, averaging only 0.5% from the start of 2005 through April 2008. The savings rate occasionally even fell below zero, indicating that Americans were dipping into savings to keep spending at a high level. Quick note:...

Pop goes Easy Al's bubble By Ikeonic ...and now consumers are beginning to switch from irrationally exuberant speculators to savers and debt payers.What does this have to do with Alan Greenspan? Allow me to explain.From CnnMoney.com:The savings rate, as calculated by the Commerce Department, hit 3.6% in December. ... Until the economic upheaval of the past year, the savings rate was at historic lows, averaging only 0.5% from the start of 2005 through April 2008. The savings rate occasionally even fell below zero, indicating that Americans were dipping into savings to keep spending at a high level. Quick note: the...

http://www.guardian.co.uk/business/poll/2009/jan/26/road-to-ruin-recession Vote for your choice 4.1% Bill Clinton: former US president 13.8% Gordon Brown: British prime minister 17.2% George W Bush: former US president 3.2% Senator Phil Gramm: former US senator and free market advocate 32% Alan Greenspan: chairman of the US Federal Reserve 1987-2006 0.6% Mervyn King: governor of the Bank of England 0.7% John Tiner: former FSA chief executive 0.3% Abby Cohen: Goldman Sachs chief US strategist 0.4% “Hank” Greenberg: former head of AIG insurance group 0.2% James Crosby: former HBOS boss 1.4% Sir Fred Goodwin: former RBS chief executive 0.3% Adam Applegarth: former Northern Rock boss 0.1%...

http://www.vanityfair.com/magazine/2009/01/stiglitz200901?printable=ture&currentPage=all

It's not easy being Alan Greenspan these days. As the former Federal Reserve chairman, he urged government regulators to take a light touch while banks like Bear Stearns and Lehman Brothers buried themselves—and the economy more generally—under a mountain of debt. Now that his reputation is plummeting faster than the stock market, he's been forced to admit a "flaw" in his hands-off ideology. Of course, things look entirely different to members of "free-market advocacy groups," as they like to be called. One such group is the Ayn Rand Institute, named after the matriarch of the movement, whose antigovernment and anti-regulation...

Link only due to FR policy.

Ayn Rand recognized a common pattern in the growth of political power: The enemies of liberty blame the free market for economic problems caused by government interference, then use those problems as a pretext for yet more political controls. Much of Rand’s prescient novel “Atlas Shrugged” revolves around that cycle. Now Rand’s critics sound exactly like the villains of Atlas. They wouldn’t attack her if they didn’t recognize her as a barrier to their grand central plans. Recently Alan Greenspan fueled the Rand hunt. In an Oct. 23 statement to a Congressional committee, Greenspan said he had “found a flaw”...

WASHINGTON -- Badgered by lawmakers, former Federal Reserve Chairman Alan Greenspan denied yesterday that the nation's economic crisis was his fault but conceded that the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a "state of shocked disbelief." Greenspan, who stepped down in 2006, called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free-market system works. He warned that things will get worse before they get better, with rising unemployment and no stabilization in housing prices for "many months." Gloomy economic reports backed him...

Alan Greenspan, the former Federal Reserve chairman, said on Thursday the credit crisis had exceeded anything he had imagined and admitted he was wrong to think that banks would protect themselves from financial market chaos. “I made a mistake in presuming that the self-interest of organisations, specifically banks and others, was such that they were best capable of protecting their own shareholders,” he said. In the second of two days of tense hearings on Capitol Hill, Henry Waxman, chairman of the House of Representatives, clashed with current and former regulators and with Republicans on his own committee over blame for...

<p>Federal regulators told Congress Thursday they're working on a plan that could help many distressed homeowners escape foreclosure in a global financial crisis that Federal Reserve Chairman Alan Greenspan warned will get worse before it gets better.</p> <p>Greenspan called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free market system functions.</p>

WASHINGTON – Federal regulators told Congress Thursday they're working on a plan that could help many distressed homeowners escape foreclosure in a global financial crisis that Federal Reserve Chairman Alan Greenspan warned will get worse before it gets better. Greenspan called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free market system functions. Accused of contributing to the meltdown, but denying that it was his fault, Greenspan told a House panel the crisis left him — an unabashed free-market advocate — in a "state of shocked disbelief." ... The longtime Fed...

WASHINGTON (Reuters) – Former U.S. Federal Reserve Chairman Alan Greenspan told Congress on Thursday he is "shocked" at the breakdown in U.S. credit markets and said he was "partially" wrong to resist regulation of some securities. Despite concerns he had in 2005 that risks were being underestimated by investors, "this crisis, however, has turned out to be much broader than anything I could have imagined," Greenspan said in remarks prepared for delivery to the House of Representatives Committee on Oversight and Government Reform. "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself...

Some people don’t like the concept of blame. They view it as useless because it wastes time in looking for a solution. I will tell you differently. Blame is useful because it identifies offenders, which is the first step in eliminating the problem. The trouble is that few have the stomach to get rid of the offenders. So, as I traveled home from prayer meeting with my children last night, we listened to a radio show discussing the current credit crisis. This was a good discussion, unlike many that I hear. But the discussion (on NPR) eventually focused on “who...

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004 George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.” And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially...