Public Heel...
"I don't think Greenspan could have done much. After his "irrational exuberance" speech, the Market recovered quickly. If he had given another, the same thing would have happened. By the third or fourth time, people would have ignored him."
Words alone are not effective - actions and policies were needed and he did nothing.
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"He could have tried raising interest rates, but all the Kudlidiots of the world would have screamed to high heaven, and he quite likely would have been outvoted in the OMC. Even if he'd been able to raise rates and choke off the bubble, he'd know that he would forever be blamed as the person who killed the greatest bull market of all time. The ensuing downside would have all been "his fault"."
Greenspan outvoted?? Not a chance. Raising rates slow the rate of growth of money supply and that was probably needed, but there were other things he could have done, such as raising margin requirements and bank reserve requirements as many (including myself) thought at the time was required. Instead, he did nothing and even continued to pump excess money into the system. He chose popularity over meeting his responsibility.
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"Sometimes, these things just are too strong, and they have to play themselves out. I'm not blaming anyone for it."
It was his job, and his responsibility, and he failed. I am done on the subject - none of us is likely to change another's opinion, and regardless of how we got here, the problem now is getting through the aftermath of the bubble. I believe we have a long road ahead of us in that regard.
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