While local economies may experience significant price imbalances, a national severe price distortion seems most unlikely in the United States, given its size and diversity.
ALAN GREENSPANI do not deny that many appear to have succeeded in a material way by cutting corners and by manipulating associates, both in their professional and in their personal lives.
More Alan Greenspan Quotes
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It seems superfluous to constrain trading in some of the newer derivatives and other innovative financial contracts of the past decade.
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History has not dealt kindly with the aftermath of protracted periods of low risk premiums.
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There is no evidence that the business cycle has been repealed.
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And the percentage changes in wage rates would be the same for all job grades.
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A decline in the national housing price level would need to be substantial to trigger a significant rise in foreclosures, because the vast majority of homeowners have built up substantial equity in their homes despite large mortgage.
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Derivatives have permitted the unbundling of financial risks.
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Cash is available and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this.
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I don’t know where the stock market is going, but I will say this, that if it continues higher, this will do more to stimulate the economy than anything we’ve been talking about today or anything anybody else was talking about.
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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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I didn’t believe in absolutes, moral or otherwise. If I couldn’t prove a proposition with facts and figures, it was without merit.
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Many of those who purchased their residence more than a year ago have equity buffers in their homes adequate to withstand any price decline other than a very deep one.
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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 believe that the general growth in large [financial] institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.
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I was a fairly good amateur musician, and I was an average professional. But the one thing I saw was that the big band business was fading.
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If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine.
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Crony capitalism is essentially a condition in which… public officials are giving favours to people in the private sector in payment of political favours.
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I 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.
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By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.
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The worst have failed; investors no longer fund them and are not likely to in the future.
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If we are dealing with psychology, then the thermometers one uses to measure it have an effect.
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But material success is possible in this world and far more satisfying when it comes without exploiting others.
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Significantly opening up immigration to skilled workers solves two problems.
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In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending.
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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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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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The very nature of finance is that it cannot be profitable unless it is significantly leveraged… and as long as there is debt, there can be failure and contagion.
ALAN GREENSPAN