Friday, September 07, 2007

 

Greenspan Hypes his new book -

Interesting how he uses the word "Turbulence" - His new book - coming out this month- has the same word in the title.....


Greenspan says market turbulence similar to prior crises

WASHINGTON (AFP) — Former Federal Reserve chairman Alan Greenspan compares the current financial market turbulence to prior crises that have engulfed stock markets and the US economy.

Greenspan, who stepped down as Fed chairman in January 2006, compared the present turmoil to prior crises triggered by hedge fund collapses, excessive land speculation and a bank panic, according to remarks in the Wall Street Journal on Friday.

"The behavior in what we are observing in the last seven weeks is identical in many respects to what we saw in 1998, what we saw in the stock market crash of 1987, I suspect what we saw in the land boom collapse of 1837 and certainly (the bank panic of) 1907," Greenspan said late Thursday, according to the online report.

The Journal said Greenspan made his remarks at an event hosted by an academic journal in Washington.

The giant Long Term Capital Management hedge fund collapsed in 1998 sparking fears on Wall Street that its implosion and losses could trigger much bigger losses across Wall Street.

The former Fed chief spoke after US and global financial markets have endured weeks of volatility sparked by America's housing downturn and rising mortgage defaults which have led major banks to tighten their lending practices.

Some banks and financial firms have also revealed hefty losses tied to mortgage-backed securities purchased during the years-long housing boom which ran out of steam in early 2006.

Greenspan said fear had now replaced euphoria.

He said "the expansion phase of the economy is quite different, and fear as a driver, which is going on today, is far more potent than euphoria."

The former Fed chairman, who has been replaced by Ben Bernanke, said "the human race has never found a way to confront bubbles."

Greenspan works as a private consultant and author.


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