Friday, September 28, 2007

Mr. Greenspan pitches his book

Former Federal Reserve chairman Alan Greenspan is on the book circuit pushing his memoir, The Age of Turbulence: Adventures in a New World. He's popping up all over the place offering advice and placing odds on everything from inflation (it's going to accelerate) to recession (more likely than one would want). (source)

Actually, he's changed his mind on recession. On September 12 he put it at 1 in 3. Today, he says just less than 50/50. One recalls Jimmy the Greek in advance of a fight or Monday night football.

He's criticized President Bush and Republicans:

"Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he said.

He has cautioned against abrupt Federal Reserve rate cuts:

Greenspan said the Fed should be careful not to cut rates too aggressively because the risk of an "inflationary resurgence" is greater now than when he was chairman, the Financial Times reported.

And in some quintessential Monday-morning quarter backing, admits the global credit crunch was well in view on the horizon for some time:

"We did know what was going on and the reason we didn't stop them was that to a large extent these types of questionably egregious actions are taken by people who have their own money invested," he said. (source)

You mean like average homeowners, who in good faith put their own money down for mortgages and find themselves flipped because property values are falling? What about the egregious actions of disreputable lenders pushing loans onto people who couldn't afford them in order to feed the insatiable appetite for potentially high-yield securities?

Well, we're all adults here and it is a new world; Ben Bernanke is chairman now. And he preferred the risk of doing too much to doing too little on interest rates. (source) A man of action almost as daring as Indiana Jones.