The probability of ten consecutive heads is 0.1 percent; thus, when you have millions of coin tossers, or investors, in the end there will be thousands of very successful practitioners of coin tossing, or stock picking.
ALAN GREENSPANThis decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from the financial markets.
More Alan Greenspan Quotes
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Gold stands in the way of this insidious process. It stands as a protector of property rights.
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I have long argued that paying down the national debt is beneficial for the economy.
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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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The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so…
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Regulation – which is based on force and fear – undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. Protection of the consumer by regulation is thus illusory.
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Indeed, better risk management may be the only truly necessary element of success in banking.
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The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War.
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Derivatives have permitted the unbundling of financial risks.
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If I say something which you understand fully in this regard, I probably made a mistake.
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The number of mistakes I have made are just awesome. There is no number large enough to account for that.
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Yet deregulation set the stage for an enormous wave of creative destruction in the 1980s.
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The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions…
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As long as we issue fiat currency, I see no alternative to a legal tender law.
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We need, in effect, to make the phantom ‘lock-boxes’ around the trust fund real.
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Credit-default swaps, I think, have serious problems associated with them.
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Now, I only play very occasionally, and in fact, more piano than clarinet or sax.
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The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.
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If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
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The increased flexibility of our economy, which has fostered our extraordinary resilience to shocks.
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Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds.
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The economy is turning, and credit comes in with a lag, .. To the extent that a number of small firms are finding it difficult to get the credit they need at a price they can afford, that’s likely to change for the better.
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But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
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Then fear hits, and it comes down very sharply. When I started to look at that.
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The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.
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The gut-feel of the 55-year old trader is more important than the mathematical elegance of the 25-year old genius.
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In the process we have created [a] privileged elite whose incomes are being supported at non-competitively high levels by immigration quotas on skilled professionals.
ALAN GREENSPAN