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Technology Stocks : Intel Corporation (INTC)
INTC 37.81-4.3%Dec 12 9:30 AM EST
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To: FR1 who wrote (168549)7/21/2002 7:21:27 PM
From: BelowTheCrowd   of 186894
 
Yeah, but I think he shouldn't have intervened to create the bubble either.

Make no mistake about it. Had he not pumped liquidity in order to battle the imagined catstrophes from Asia, Russia and LTCM. Had he left things alone, we most certainly would have seen some failures, maybe big ones. The alternative was to bail out everybody by inflating the equity market to the point of absurdity. He pumped the liquidity. He saved LTCM, and created a crisis of a different kind instead.

When money's cheap, people spend it on stupid things, like dotcom stocks or 27 seperate broadband/long distance carriers. Greenspan made money cheap and built up an "economy" that was not sustaniable except in the absence of more and more cheaper and cheaper money.

Should have let LTCM die and dealt with the consequences of it. We would have lost a couple of banks and other businesses, but probably suffered a much smaller loss overall than we have in the past two years. The stock market would have returned to a sane equalibrium much sooner than it will now.

The question is not about what Greenspan did in 2000. It's about the sequence of ill-advised decisions he started making after 1996. Decisions that did nothing but excacerbate the problems, both moving up and moving down.

mg
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