<font color=red>HOORARY FOR ALAN GREEN$PAN
<...he will ride off into the sunset as the greatest Fed Chairman ever. He got us through the Crash of '87, the '91 recession, the '98 Asian Contagion, Y2K, and the Internet Bubble with barely a scratch - other than to the folks who piled into tech on margin in '99. >
Don't forget the Mexican $50 billion bailout which was a great success and stabilized the southern border and economic flows [about 1995]. He persuaded Clinton of the importance [if I remember rightly]. Clinton, to his credit, understood the issue. Clinton is greatly misunderestimated by the rabid right, obsessed by his saucy friends and probably jealous of him too.
Add to the 1998 Asian Contagion the Globalstar-precipitated collapse of Long Term Capital Management which could have led to a global implosion precipitated by a derivatives collapse.
My greatest global financial fear [starting about 1996 or 1997 if I remember rightly] was that when the big test of the stability and market-clearing capacity of derivatives and other financial instruments inevitably happened, there would be a huge deflationary collapse as each layer collapsed into the next, forcing a vast selloff as loans were called and collateral sold, like the WTC, with weakened supports in one area, suffered floor on floor overloading and collapse.
I decided that Uncle Al would be able to stabilize the situation. He was obviously mindful of the danger, discussing the identification of irrational exuberance in his famous December 1996 speech and what it could mean for markets and financial stability.
People moaned when he raised interest rates to squeeze the irrational exuberance. It is good that he did. He had the room to then conduct the largest and fastest reduction in interest rates, to the lowest levels, in human history. [That might be a bit of poetic license - I haven't checked]. He could also print up a vast flood of liquidity to help things along.
I had ranted for a year or two that that is what he would do and I bet on it. Right on cue, good old Uncle Al came in and did as expected. There was no financial collapse! Certainly the bubble went pop and there was great individual financial collapse, but the system's integrity held in the biggest financial test in human history. [I haven't checked that either, but I bet it was - successfully passed test anyway]. The Dow is near all-time highs after a 2001 dip.
Don't forget also, the collapse of the WTC happened at a crucial time in the rapid winding-down and market-clearing of the Y2K market mania and could easily have precipitated a financial implosion of majestic proportions. Uncle Al helped hold the line at a traumatic time for civilization versus barbarianism.
After 2 x 105 [or so] stories collapsed, one on the other in a heart-rending, tear-causing, desecration of human hopes, creativity, intelligence, co-operation and energy, there was a real risk that the world's financial system could go the same way*.
Thanks to the 9 months of financial stabilizing which had gone on already and the psychic resilience of a free world to the assault by superstitious barbarians, there was no matching implosion of the financial system, which would have been a huge success for those bent on destruction of freedom and usurpation by medieval mullahs and Islamic madness.
Sure, Uncle Al didn't do it all alone, but he acted at crucial times and in crucial places to hold the structure together. If an engineer had been able to provide temporary structural support at a few key points in the WTC buildings after the damage, they would be still standing today. Uncle Al was able to provide that financial stabilisation at critical junctures.
Argentina is an example [yet another] of what can happen if management of financial systems is not robust.
Hoorary for Chairman Green$pan, freedom, 6 billion people and what we can create in the bonds of love.
Mqurice
PS: Hey, DJ, did you get all the way to here? "Yeah, yeah!! Same old...same old..."
* While there was risk of global financial collapse due to the WTC destruction at a sensitive time in the market-clearing of the irrational exuberance, it is nice to know that the attackers were punching at a ghost in one way. The worst-affected company had duplication of their systems at a base over the river. The relatively few survivors were able to go to a different location and continue right on from the day before . Cyberspace passed the test of the reason it was originally built [Arpanet]; to make systems immune to attack. |
