Good morning Frank. I would not call Greenspan a mad man etc. He does done a pretty good job for the economy all in all. I do believe that he is honest in his believes. It's not that he is the only one that holds those old views, like the Philip curve. He has been trying to say that he is going for this new paradigm but sometimes you can't teach an old dog new tricks. He is not alone. He has plenty of company in the FED and I am pretty sure if he had listened to them, interest rates would even be higher. We know some of those past Fed Govs. who are pretty hawkish and I am pretty sure that there are quite a few hawkish FED's there right now. It's not exactly a dictatorship, even if it does look like it at times. Greenspan has a BIG say at the FED but it's not the ONLY say. They are voting but generally try to go along with the FED Chairman.
I guess you saw this new data this morning? Under the old rules, a 6% plus GDP would probably cause havoc among economists. But it looks like the productivity could be up even more than the rise of this data. So, NO inflation. A big part WAS the oil prices.
Anyhow. Whatever happens, at least the FED will raise in small increments of 25 basis points, if they do raise the interest rates. Consensus is maybe another 2 times. That will give the FED plenty of time to check out the facts. Who said: Give me facts, nothing but facts? gg. I believe the FED should give it a rest and see how those last 4 hikes will effect the economy. I don't believe rate hikes should be overdone again like in 87 and the twenties. That alone can cause more damage at times than anything else. Right. Fight inflation but if you can't see it, don't worry about it to extremes.
The market is doing its up and down thing again today. Maybe things will work out alright. I am pretty sure Greenspan is not INTENTIOALLY trying to wreck the economy. Try not to use those big words Frank. I am pretty sure that Greenspan is a good American and is on our side. gg. I know it does not look like it. Mr. Seidman was a banker and even he says that Mr. Greenspan has a tough job. He just don't quite understand, like the rest of us, what Greenspan is doing right now. If you listen to all those economists and all those brokerage houses, nobody has ever seen anything like what's going on today. This internet revolution is a hard nut to crack for those old timers and I am pretty sure, even for the new breed. Mr. Greenspan's wife has a nice portfolio. I believe it's, what they call, the old time stocks. I am sure he is not trying to wreck her portfolio just to spite her. gg.
I am pretty sure that Mr. Greenspan is listening and looking to all kinds of stuff. And who could do the job at this time? I have seen nobody falling over their 2 feet to apply for this job. Mr. Summers did not spread too much confidence in the markets when he waffled in his bond speeches. Come to think of it. I have not heard him talk at all lately. He is probably taking Greenspeak lessons. gg.
The one thing I still advocate is to open up the FED so the financial markets know what's going on there and Mr. Greenspan SHOULD start speaking plain English at all times and not Greenspeak. After being pressed at that last meeting he actually learned to speak in words everybody could understand. gg. I believe a FED should speak clearly. I can't see the advantage of playing hide and seek in the financial markets.
Sonny |
