Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
ALAN GREENSPANI made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms.
More Alan Greenspan Quotes
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…our market system depends critically on trust-trust in the word of our colleagues and trust in the word of those with whom we do business.
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Political decisions are never random and will always lose out to innovative alternatives.
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Whatever you tax you get less of.
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We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
ALAN GREENSPAN -
Greenspan, who knew so much more than most, knew far less than most supposed.
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Anything that we can do to raise personal savings is very much in the interest of this country.
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Was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.
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Recent episodes in which Fed officials hinted at a shift toward higher interest rates have unleashed significant volatility in markets.
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Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity are in a state of shocked disbelief.
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They then need to reach a judgment about the probabilities, costs, and benefits of the various possible outcomes under alternative choices for policy.
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It keeps interest rates lower than they otherwise would be and frees savings to finance increases in the capital stock, thereby boosting productivity and real incomes.
ALAN GREENSPAN -
Without the triggers, that tax cut is irreponsible fiscal policy. Eventually, I think that will be the consensus view.
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Derivatives have permitted the unbundling of financial risks.
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We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs and price stability.
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But material success is possible in this world and far more satisfying when it comes without exploiting others.
ALAN GREENSPAN






