Aug

14

 There was discussion here about the importance of doc Greenspan warning of euphoria bubble in bonds. Some were skeptical. I said that regardless of a person's current acumen, the memory of his past deeds lingers on until eternity. Furthermore, I say he is a man of great gravitas with the Fed. They're such a bunch of fuddy duddies so enraptured with their undeserved status that they are bound to treat a former chair with great undeserved respect.

Ken Drees writes:

This to me seems very plain and straight forward, very uncomplex and without a whiff of fraudulent opacity. And since rates are already backing up and the Fed needs to get on the right side of things, the 1/8pt peck on the cheek may just be coming in September. But Dr. Greenspan also said that you can't tell when its a bubble till its been popped, so this statement could simply be interpreted as financial entertainment—remember Wayne Angell?

Alan Greenspan has a warning for bond investors as the U.S. central bank
prepares to raise its benchmark interest rate from close to zero. "We
have a pending bond market bubble," the former Federal Reserve chairman
said Monday in an interview with Bloomberg. "What ultimately will
determine where it goes is to reach back and to ask ourselves where is
the normal interest rate?"


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  1. Gustavo Corral on August 27, 2015 6:37 pm

    Greenspan was right ( although early ) in the 90s with his “irrational exuberance” forecast and wrong in the 00s by paying too much attention to statistics on mortgages ( you can easily get a “once in a century” event if the model in your head is wrong ). He is a great example of why we should all periodically do a reality check and look out the window for our opinions instead of at our monitors.

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