How Many Ways Do I Disagree with Alan Greenspan?
by Tom on July 31, 2008
in Education, Market Musings
I heard a comparison tonight between Alan Greenspan and Brett Favre. The connection? Neither one of them likes being out of the spotlight. Greenspan did an interview and I’m entitling this review, “How Many Ways Do I Disagree with Alan?” Here goes….
1. House prices.
Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating.
How does he know that prices are no where near the bottom? And how can he make such blanket statements? No one who knows anything about the housing market would make the same claims about Florida, California and Michigan as they would about Texas and other places. Check out the graphic here.
2. Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, are a “major accident waiting to happen,” Greenspan said. `
An Accident Waiting To Happen? What is he thinking? Fannie and Freddie are probably some of the most closely watched financial institutions today. Aren’t they the ones who just had a major bill passed by Congress to keep them stable? And now he says that they are an accident waiting to happen?
3.`The solution” is the “nationalization” of the companies, he said.
Nationalization is the answer? So, the Maestro suddenly knows the answer for all of the problems at Fannie and Freddie? Paulson and Bernanke and their staff are spending hours and hours and hours working to make sure that Fannie and Freddie stay stable and operating and suddenly the retired (get that, retired?) Greenspan knows all the answers?
4. eventual sale back to the market as “five or 10 separate entities,” he said.
5 or 10 entities? Fannie, Freddie, Frieda, Frank, Fernando and Faye? Why do the markets keep listening to him? He should be working on his golf game, not riling up the markets to make himself feel important.
5. Policy makers also need to reconcile slowing economic growth with rising prices, he said. The U.S. faces “a very substantial change in the balance between growth and inflation.”
Okay, what does it matter that he brings that up? Is he trying to “be the boss” and send a message to Ben and Hank how to do things? My 7 year old has “issues” with trying to be the boss and tell others what to do.
6. Still, Greenspan said he was “uncomfortable” with aspects of the Bear Stearns Cos. rescue.
Okay, who wasn’t uncomfortable with the Bear Stearns rescue? I mean, really, anyone who knows that we were literally hours away from a financial meltdown and the Fed had to engineer in a weekend what normally takes months would be “uncomfortable” with it.
The news people need to stop asking Greenspan for his opinions. Greenspan needs to realize that he had his time in the sun and it’s over. He’s attempting to grab more of the limelight and it’s disruptive, manipulative and not good for the economy or the country.
What do you think?
Tom Vanderwell
Comments
No Responses to “How Many Ways Do I Disagree with Alan Greenspan?”