left right politics showbiz tech invest good life gossip fun hot
Mother Jones Hot Air Huffpo Variety Engadget Seeking Alpha Lifehacker TheSuperficial Daily Beast reddit
Daily Kos Michelle Malkin Politico Billboard Boing Boing TheBigPicture Luxist TMZ.com Fark BuzzFeed
ThinkProgress RightWingNews First Read CNN Showbiz Gizmodo FT Alphaville Joystiq Perez Hilton 4chan memorandum
Crooks+Liars Power Line CNN ticker E! Online Techcrunch Josh Brown Kotaku gamer Bastardly Post Secret Techmeme
TalkngPtsMemo Ameri..Thinker Swampland TV Guide Ars Technica 24/7 Wall St. TreeHugger Egotastic hascheezburgr Drudge
The Raw Story NewsBusters The Caucus Ent. News Mashable bloggingstocks Consumerist PinkIsTheNew dooce digg
Wonkette Wizbang fishbowlDC HlywdWiretap Google blog DealBook lifehack.org CelebrityBaby Someth'nAwful trends
Atrios Taki Magazine WashWhisprs DeadlnHllywd Read/Write Jeff Matthews 43folders GoFugYourself Neatorama PSFK
Firedoglake Big Hollywood The Fix MSN Ent. OReilly Radar PhilsStockWorld Autoblog Page Six Cool Hunter BBC
Young Turks IMAO Capital Gains Rot'nTomatoes GigaOM Daily Rec'ng Deadspin BestWeekEver stereogum Timespop
Americablog AceOfSpades Open Secrets Cinematical ProBlogger Zero Hedge DownloadSqd Dlisted CuteOverload media eye
Politicususa Redstate WikiLeaks law Cool Tools Bespoke MediaZone PopSugar Dilbert blog TVNewser
CounterPunch Jawa Report econ law.alltop Scobleizer BtwTheHedges Deviant ArtHollyw'dTuna gapingvoid BuzzMachine
TalkLeft Patterico EconLog Volokh Consp. Apple Blog Minyanville Gothamist x17online DailyGrail MediaGazer
Feministing Townhall.com Freakonomics Legal Insurrec.. Valleywag Fast Money Curbed DailyBlabber Prof. Hex Steve Rubel
PolitAnimal OutsideBeltwy CrookedTimbr Conglomerate mozillaZine RealClearMkts FabSugar Gawker OvrheardinNY MediaBlgNRO
Truthdig Moonbattery MarginalRevo SportsLawBlog Smashing W$J Mktbeat Gridskipper Radar Last.fm Threat Level
Alternet RealClearPoli crime W$J Law BlogTechdirt AbnormalRtrns Material Defamer kottke.org Seth's blog
Media Matters Instapundit CrimeblogsBalkinizationMAKE RandomRoger Sartorialist Jossip PumpkinChuckin mediamatters
The Nation Hugh Hewitt All Crime Credit Slips SrchEngLand Stock Advisors Drink'nMadeEasy Just Jared Maps Mania Newshounds
Maddow Blog PJ Media Smoking Gun FindLaw VentureBeat Slope of Hope Mark Cuban Celebitchy CollegeHumor FAIR

Wednesday, October 26, 2005

God Bless Alan Greenspan - Will we miss you?

Alan Greenspan?
Alan Greenspan: enigma

Did a "Greenspan Effect" cause the global warming of the financial markets?

Alan Greenspan, the Chairman of The Federal Reserve is exiting the world stage to applause sprinkled with some boos. James Grant for one thinks Greenspan was a con man:
The public worships Alan Greenspan for his oracular wisdom. But what is his legacy? It includes a crazy housing market, overextended consumers and a burst stock bubble

The most revered figure in American finance happens to be an aging price controller. Until the end of January the price of a short-term loan--the federal funds rate--will be whatever the chairman of the Federal Reserve Board decides to make it.

Never mind the conundrum of a flattish yield curve, where ten-year Treasurys now yield only six-tenths of a percentage point more than the funds rate. Alan Greenspan, 79, is a conundrum himself, personally: capitalist price controller, Ayn Rand-trained public servant and, most oxymoronic of all, beloved central banker.

His imminent leave-taking presents an occasion both to appraise his 18-year Fed stewardship and, more important, to speculate on its consequences to all who hold, save or invest the U.S. dollar.
Some astute financial forecasters believe a bad "hurricane season" is brewing in the warm frothy waters of the financial markets that Greenspan is leaving as his legacy. Will an unexpected category 5 financial crisis hit the newly appointed Fed chief, Ben Bernanke, squarely in the chops? Stephen S. Roach, the chief economist for Morgan Stanley, thinks so:
MOST FED chairmen are blindsided early on in their tenure...

The U.S. economy actually faces far greater threats than inflation - threats that an inflation targeter such as Bernanke may be ill-equipped to deal with.

At the top of the list is a record U.S. current account deficit the broadest measure of the nation's trade balance (imbalance, in this case) with the rest of the world. Running at an annual rate of close to $800 billion in the first half of 2005, it requires foreign funding to the tune of $3 billion per business day. To accomplish that without a sharp drop in the dollar and/or a related backup in interest rates requires extraordinary confidence on the part of foreign investors in U.S. assets.
Will the first big financial storm during Bernanke's term be named Hurricane Alan? Anyway, it sounds like you may need to sell your house and move to high ground. Or at least get your boots on and have your bailing buckets ready.

The ambush waiting for Bernanke [Roach, LA Times (sub required), Oct. 26, 2005]
Tough flying for the global economy [Roach, Asia Times, Oct. 26, 2005]
O Sage! O Confidence Man! [James Grant, Forbes, Oct. 31, 2005]

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia