Greenspan's testimony

[mully]

These words from Alan Greenspan this afternoon do not appear to suggest an immediate interest rate rise. But the interpretation is up to each of you.

"As I have noted previously, the federal funds rate must rise at some point to prevent pressures on price inflation from eventually emerging. As yet, the protracted period of monetary accommodation has not fostered an environment in which broad-based inflation pressures appear to be building. But the Federal Reserve recognizes that sustained prosperity requires the maintenance of price stability and will act, as necessary, to ensure that outcome."

 

[bracke]

So to put that into plain English as opposed to fancy American.
Interest rates will go up when inflation starts to rise which is not just yet.

Hardly earth shattering or leading edge economics, just plain commonsense.

Regards

bracke

 

[mully]

Interesting the rather disappointing reaction (so far) by US equity markets to the comforting comments( re last night's reaction) made by Greenspan this afternoon.

 

[Salty Gibbon]

I think he was trying hard not to tank the market again like he did yesterday.

It might take a day or two to get over it.

 

[stevem12]

Depends on whether you were short the pull back or not

 

[BBB]

Bracke - bang on. But unless you can 'reverse engineer' a basic statement then how are you going to earn your 'cred'

I will never forget a tutor of mine at Uni. when my mate asked him how to earn a wedge in IT (I studied computing systems) he replied 'You need credibility and convince people you know your stuff. Blind them with science and baffle them with Bullsh!t' LOL

True in any walk of life. Politicians especially!!

 

[oatman]

Even the markets can only take so much crap. They start to look beyond it.

 

[oatman]

I preferred him when he sang "Spirit in the Sky".
Done well for himself though :cheesy:

 

[Salty Gibbon]

Any guesses for how low we go ?

 

[bracke]

BBB

I like 'reverse engineer' it sounds so much better than 'spin '.

almost - but not quite - gives credibility to statements

Oatman

'So much crap' Do you mean 'reverse engineer'!

It would seem that the usa markets are now accepting that the writing is on the wall and that a rise in interest rates is not too far off.

Salty Gibbon

From what I am reading the next stopping point for the dow is 10,150.

Regards

bracke

 

[gist]

And the next Greenspan Gem:

"The economic recovery may falter if tax cuts expire"

Most enlightening, Alan.

 

[oatman]

bracke, they must know they're kidding themselves by now.

 

[Salty Gibbon]

I preferred him when he sang "Spirit in the Sky".

Was that Simon Greenspan or Alan Greenbaum ?

 

[oatman]

Norman

 

[Salty Gibbon]

Yeah sorry - you're right.

Never mind spirit in the sky though - better spirit in the bottle.

 

[bracke]

oatman

I agree. I think that the markets have known for some time but it pays the the financial services to maintain the illusion that its all upward.

As for Mr Bush he just wants to maintain the 'up' until after the election but I think that is going to be too far away.

As for Mr Greenspan. I dont know. He has kept the american dream reasonably on track but the budget defecit and levels of government and consumer debt are staggering, As long as the dollar is perceived as an ok currency and the econmy picks up he can bring things back into line again if not, it does not bear thinking about. Like it or not it is the american economy which drives the global economy.

Regards

bracke

 

[Salty Gibbon]

Bloody good job Bush doesn't have to testify.

Markets would tank, dump and double-dump, dead cat bounce and triple dump.

 

[oatman]

Trouble is that as other economies grow, the power of the dollar is gradually diluted. At the moment the US dictates how their monetary fiddling affects their own economy with total disregard for the rest of the world. The cracks will appear.

 

[DaveJB]

Oatman,
seconded - definitely Norman, I think it was his only hit....
SG - no no no, THAT was The Police....

 

[DaveJB]

Bush could testify (or more likely something along the lines of 'testiferate') until the cows came home, it'd be gibberish and the sort of stuff a 10 yr old would cringe at handing in.
Meanwhile, like all major cons, it will hold itself up - defying gravity - until something pulls out the bottom card. Belief is like that, and the longer it runs the more it appears that belief is the support for it all... commonsense pulled the plug long ago.
I'll bet lots of people claim to have predicted it when it happens <g>