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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: loantech who wrote (58011)	4/12/2006 11:53:10 AM
From: ild	Read Replies (2) \| Respond to of 110194

The Maestro, at It Again 9:57 a.m.: Former Federal Reserve Chairman Alan Greenspan, speaking via satellite to a Financial Times summit in Seoul, said global imbalances (such as the $65.75 billion February U.S. trade deficit reported this morning) would improve if fast-growing economies -- China -- would let their currencies appreciate against the dollar. No reported exclamations of "duh" so far. Mr. Greenspan also warned that asset prices could fall world-wide if global liquidity -- econojargon for trillions of dollars and other currency sloshing around -- declines from its current high level, which he described as an "abnormal situation" that can't last forever. When asked about where all of this liquidity came from, Mr. Greenspan said the source was "the market value of assets world-wide, which had been rising faster than nominal gross domestic product globally due to a decline in real long-term interest rates and a significant fall in real equity premiums." At Minyanville.com, the financial site's authors were "shocked, SHOCKED" by this statement. What the statement really means, they say, is that the source of the liquidity is "the rising market value of asset values due to excess liquidity." In another moment of candor, Mr. Greenspan expressed regret that he ever used the term that he's most famous for: irrational exuberance. "I'm sorry I used that term," the ex-chairman said. "It's one which does suggest a froth in the market place. I would hesitate to use it in today's context."