Bull market is over, run for cover says Alan Greenspan

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Elysium
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Bull market is over, run for cover says Alan Greenspan

Post by Elysium » Tue Dec 18, 2018 7:08 pm

The former fed chairman Alan Greenspan says about the current market "It would be very surprising to see it sort of stabilize here, and then take off"

He added that markets could still go up further — but warned investors that the correction would be painful: "At the end of that run, run for cover."

The former chairman also warned that the United States may be poised for a period of stagflation, "a toxic mix" when the economy suffers from high inflation and high unemployment. The last time the country experienced such an episode was in the 1970s and early 1980s.

Here is the link to news item:
https://www.cnn.com/2018/12/18/business ... index.html

Personally, I do not rate Greenspan very high at all, and think he is responsible for two bubbles forming on his watch, the late 90's tech bubble and the 2007-08 sub-prime lending crisis from his loose money policies fueling housing expansion.

Even if one thought he is credible, all market predictions should fall under the "no one knows nothing" category.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by selters » Tue Dec 18, 2018 7:12 pm

Hasn't he been saying this since 1996? Or at least 2011? The same with Schiller and Sharpe?

But then again, Greenspan may be right. We might see 10 years of flat to negative returns also.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by WhiteMaxima » Tue Dec 18, 2018 7:15 pm

Run for safety doesn't mean you out of market completely. If you have invested very aggressively, turn down a little bit. Preserve capital is always more import than earning the last dollar.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by frugalecon » Tue Dec 18, 2018 7:19 pm

Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by baconavocado » Tue Dec 18, 2018 7:22 pm

Market timing advice from Alan Greenspan.

Ok . . .

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Re: Bull market is over, run for cover says Alan Greenspan

Post by RadAudit » Tue Dec 18, 2018 7:24 pm

Didn't he miss the irrational exuberance call by a couple of years? I'm sure he is right on the call, given the qualifiers. I'm just not sure of the timing. So, as long as he doesn't identify both direction and timing, his call should be right sooner or later.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by WanderingDoc » Tue Dec 18, 2018 7:29 pm

frugalecon wrote:
Tue Dec 18, 2018 7:19 pm
Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.
Must be doing well! :moneybag
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Artsdoctor » Tue Dec 18, 2018 7:36 pm

Eventually, Greenspan will be right. In reality, anyone claiming that a bear market is inevitable will be right. The only question would be when this might happen. Greenspan gave his "irrational exuberance" speech in 1996 and he was eventually right, but only after 4 more years of significant gains.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by frugalecon » Tue Dec 18, 2018 7:40 pm

WanderingDoc wrote:
Tue Dec 18, 2018 7:29 pm
frugalecon wrote:
Tue Dec 18, 2018 7:19 pm
Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.
Must be doing well! :moneybag
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Re: Bull market is over, run for cover says Alan Greenspan

Post by sunnywindy » Tue Dec 18, 2018 8:02 pm

For the past 4-5 years, I've thought listening to Greenspan interviews that he was talking like he was stuck in the 1990's in the sense that the 1990s were his baseline of comparison and everything revolved around that. I'm sure we all do this in one way or another, but as you age, I think it's harder not to do it.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by libralibra » Tue Dec 18, 2018 8:43 pm

This OP (unwittingly) called the market top, to the day. Much better than Greenspan's predictions.
viewtopic.php?t=260259

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Re: Bull market is over, run for cover says Alan Greenspan

Post by F150HD » Tue Dec 18, 2018 8:54 pm

read somewhere that Greenspan still uses Netscape Navigator. :confused
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Re: Bull market is over, run for cover says Alan Greenspan

Post by aspirit » Tue Dec 18, 2018 9:18 pm

Greenspan on USAs debt.30seconds watch the guy he is with's face,its classic. :shock: https://www.youtube.com/watch?v=-27gWmXprdE.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by OnTrack » Tue Dec 18, 2018 10:07 pm

frugalecon wrote:
Tue Dec 18, 2018 7:19 pm
Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.
I guess his views are newsworthy because he was a Fed Chair. I have no idea if his predictions and warnings will hold up in the future. But being 92 years of age and frail are not reasons to dismiss them. Many people age 92 still have very sharp minds as well as wisdom gained during their life journey.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Dottie57 » Tue Dec 18, 2018 10:18 pm

I just hate it when someone says run to cover but does not specify where to go.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Portfolio7 » Tue Dec 18, 2018 10:56 pm

All these pundits clucking about a recession in the next year or so are starting to make me suspect we're years away.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by All Seasons » Tue Dec 18, 2018 11:09 pm

Alan Greenspan says a lot of things. :)
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Nicolas » Tue Dec 18, 2018 11:16 pm

Everybody’s bearish! No bulls! Got to be good news, eh? (In a contrarian sense).

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Re: Bull market is over, run for cover says Alan Greenspan

Post by DeadPoets » Wed Dec 19, 2018 12:02 am

frugalecon wrote:
Tue Dec 18, 2018 7:19 pm
Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.
Frail at 92? No way.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by tea_pirate » Wed Dec 19, 2018 6:40 am

RadAudit wrote:
Tue Dec 18, 2018 7:24 pm
Didn't he miss the irrational exuberance call by a couple of years? I'm sure he is right on the call, given the qualifiers. I'm just not sure of the timing. So, as long as he doesn't identify both direction and timing, his call should be right sooner or later.
Yup. Comment was made in December 1996 with S&P 500 around 740. The S&P 500 continued on to hit just nearly double that value at its peak in 2000 (not even including dividends). We all know what happened next.

Interestingly enough the bottom was around 800 in September 2002. So the S&P 500 was never as low again as it was after Greenspan's call of irrational exuberance.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Valuethinker » Wed Dec 19, 2018 6:57 am

F150HD wrote:
Tue Dec 18, 2018 8:54 pm
read somewhere that Greenspan still uses Netscape Navigator. :confused
As far as I know that's not possible?

I used NN (and still sometimes call Firefox "Netscape").

But I don't think it will run on any hardware nor access websites correctly. (maybe there's an emulator mode you could use - as with old computer games, I do miss Steel Panthers!).

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Re: Bull market is over, run for cover says Alan Greenspan

Post by spectec » Wed Dec 19, 2018 7:26 am

"I know you believe you understand what you think I said, but I am not sure you realize that what you heard is not what I meant,"

most relevant Alan Greenspan quote, reportedly in an address to Congress. (Although some sources attribute it to Robert McCloskey)
Last edited by spectec on Wed Dec 19, 2018 7:32 am, edited 1 time in total.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Valuethinker » Wed Dec 19, 2018 7:28 am

Elysium wrote:
Tue Dec 18, 2018 7:08 pm
The former fed chairman Alan Greenspan says about the current market "It would be very surprising to see it sort of stabilize here, and then take off"

He added that markets could still go up further — but warned investors that the correction would be painful: "At the end of that run, run for cover."

The former chairman also warned that the United States may be poised for a period of stagflation, "a toxic mix" when the economy suffers from high inflation and high unemployment. The last time the country experienced such an episode was in the 1970s and early 1980s.

Here is the link to news item:
https://www.cnn.com/2018/12/18/business ... index.html

Personally, I do not rate Greenspan very high at all, and think he is responsible for two bubbles forming on his watch, the late 90's tech bubble and the 2007-08 sub-prime lending crisis from his loose money policies fueling housing expansion.

Even if one thought he is credible, all market predictions should fall under the "no one knows nothing" category.
Someone can be good at one thing and that skill does not generalize.

We can respect Greenspan for what he achieved as a Central Banker in the 1990s but that does not mean he can call markets.

It's clear, I think, that deregulation which he gave ascent to, went too far and allowed the credit bubble and the Great Financial Crisis to take place. He was not alone in that, but he was ideologically minded that way (close personal friend of Ayn Rand, etc.).

I wouldn't give him more credence than another expert on calling stock markets.

Stagflation? It is his area, but so far I don't see any sign of that.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by JoMoney » Wed Dec 19, 2018 7:30 am

... He added that markets could still go up further — but warned investors that the correction would be painful ...
So the market can go up further, but when a correction occurs it will be painful :confused
Profound insight there.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Socal77 » Wed Dec 19, 2018 7:33 am

Seems it's been popular to hate on Greenspan for quite some time. Fallacy of the media sneaking into otherwise bright Boglehead minds.

He is just another commentator through which you can choose to, or not choose to listen to. He's just as relevant to listen to as anyone else.
Last edited by Socal77 on Wed Dec 19, 2018 7:45 am, edited 1 time in total.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by columbia » Wed Dec 19, 2018 7:36 am

I can’t prove that he’s correct, but in believe that he is. :o
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Valuethinker » Wed Dec 19, 2018 8:58 am

Socal77 wrote:
Wed Dec 19, 2018 7:33 am
Seems it's been popular to hate on Greenspan for quite some time. Fallacy of the media sneaking into otherwise bright Boglehead minds.

He is just another commentator through which you can choose to, or not choose to listen to. He's just as relevant to listen to as anyone else.
By contrast he has admitted his mistakes to Congress (and in his book) in trusting markets to self regulate. So he has shown intellectual flexibility when faced with a change in the data.

Greenspan was not an economist (ie no Phd as would be usual with professional economists) by education but made his name as someone with an intense feel for the data, what it told him about where the US economy was going. This led him in the mid 1990s to keep interest rates lower for longer - because he could see in the numbers that the outsourcing of manufacturing, particularly to China, was keeping inflation low despite a surging economy, full employment etc. It was a data call and it looked inspired at the time (and he was right about inflation - that things had changed from the 1970s and 1980s).

So it's reassuring that new data has changed his views on certain issues - particularly since he was a die-hard deregulator (partly no doubt the influence of Ayn Rand, who was a close personal friend and mentor). Shows a mental acuity at an advanced age.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Socal77 » Wed Dec 19, 2018 9:16 am

Valuethinker wrote:
Wed Dec 19, 2018 8:58 am
Socal77 wrote:
Wed Dec 19, 2018 7:33 am
Seems it's been popular to hate on Greenspan for quite some time. Fallacy of the media sneaking into otherwise bright Boglehead minds.

He is just another commentator through which you can choose to, or not choose to listen to. He's just as relevant to listen to as anyone else.
By contrast he has admitted his mistakes to Congress (and in his book) in trusting markets to self regulate. So he has shown intellectual flexibility when faced with a change in the data.

Greenspan was not an economist (ie no Phd as would be usual with professional economists) by education but made his name as someone with an intense feel for the data, what it told him about where the US economy was going. This led him in the mid 1990s to keep interest rates lower for longer - because he could see in the numbers that the outsourcing of manufacturing, particularly to China, was keeping inflation low despite a surging economy, full employment etc. It was a data call and it looked inspired at the time (and he was right about inflation - that things had changed from the 1970s and 1980s).

So it's reassuring that new data has changed his views on certain issues - particularly since he was a die-hard deregulator (partly no doubt the influence of Ayn Rand, who was a close personal friend and mentor). Shows a mental acuity at an advanced age.
The thing is, what's the alternative? For sure free markets can develop inefficiencies.

Should we, (can we), pre-regulate all future free market activities so as to make sure nothing goes wrong?

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Re: Bull market is over, run for cover says Alan Greenspan

Post by nisiprius » Wed Dec 19, 2018 9:25 am

Let me try a quick test. How long will it take me to find a very confident prediction by a big cheese saying "The bull market is not over, plenty of meat on the bone, don't miss out on the greatest opportunity of your lifetime, etc. etc." It is now 9:25. If I don't find one pretty quickly I'll edit the post to say I gave up.

It is now 9:28.

"Goldman Sees Bull Market In 2019 Despite Investor Pessimism" but opinion is only attributed to "Goldman."

"The Bull Case For Stocks Is Compelling: An economic slowdown might actually extend the life of the expansion and the bull market in equities." It's the opinion of "Charles Lieberman." Never heard of him.

'Wall Street's stock forecasters see the bull market stretching to one more year." OK, That's pay dirt, I think. The S&P 500 is 2,500-something... 2,546.

Image

Of course I don't recognize any of those names, but look at that. The most pessimistic forecast is 2,900 which... wow... implies 14% returns in 2019. Not counting dividends.

Do I believe any of it? No, I do not. And yes, I get it that Wall Street firms generally want investors to buy stocks.

But, gee, one big cheese versus thirteen medium cheeses...
Last edited by nisiprius on Wed Dec 19, 2018 9:40 am, edited 3 times in total.
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Jeff Albertson » Wed Dec 19, 2018 9:29 am

from the Economist, on Paul Samuelson's death:
As for Mr Samuelson's friend of 50 years, Alan Greenspan, once chairman of the Federal Reserve, “the trouble is that he had been an Ayn Rander”—a devotee of laissez-faire capitalism. “You can take the boy out of the cult but you can't take the cult out of the boy,” Mr Samuelson told the Atlantic this summer. “He actually had [an] instruction, probably pinned on the wall: ‘Nothing from this office should go forth which discredits the capitalist system. Greed is good'.”
Yet Mr Samuelson also understood that beyond the ivory tower the conditions necessary for efficient markets rarely existed; they needed regulating. “To understand economics you need to know not only fundamentals but also its nuances,” Mr Samuelson would explain. “When someone preaches ‘Economics in one lesson' I advise: Go back for the second lesson.” The latest crisis (for which he felt some responsibility, since he had helped develop financial derivatives that company executives did not understand) proved that “free markets do not stabilise themselves. Zero regulating is vastly suboptimal to rational regulating. Libertarianism is its own worst enemy!”
https://www.economist.com/finance-and-e ... -samuelson

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Valuethinker » Wed Dec 19, 2018 10:01 am

Socal77 wrote:
Wed Dec 19, 2018 9:16 am
Valuethinker wrote:
Wed Dec 19, 2018 8:58 am
Socal77 wrote:
Wed Dec 19, 2018 7:33 am
Seems it's been popular to hate on Greenspan for quite some time. Fallacy of the media sneaking into otherwise bright Boglehead minds.

He is just another commentator through which you can choose to, or not choose to listen to. He's just as relevant to listen to as anyone else.
By contrast he has admitted his mistakes to Congress (and in his book) in trusting markets to self regulate. So he has shown intellectual flexibility when faced with a change in the data.

Greenspan was not an economist (ie no Phd as would be usual with professional economists) by education but made his name as someone with an intense feel for the data, what it told him about where the US economy was going. This led him in the mid 1990s to keep interest rates lower for longer - because he could see in the numbers that the outsourcing of manufacturing, particularly to China, was keeping inflation low despite a surging economy, full employment etc. It was a data call and it looked inspired at the time (and he was right about inflation - that things had changed from the 1970s and 1980s).

So it's reassuring that new data has changed his views on certain issues - particularly since he was a die-hard deregulator (partly no doubt the influence of Ayn Rand, who was a close personal friend and mentor). Shows a mental acuity at an advanced age.
The thing is, what's the alternative? For sure free markets can develop inefficiencies.

Should we, (can we), pre-regulate all future free market activities so as to make sure nothing goes wrong?
Since the early decades of the 20th century we have accepted the need for regulation.

In the financial services case, this includes:

- Stock Exchange rules
- rules on public companies as per SEC - disclosure, insider dealing, corporate ethics etc.
- the rest of the architecture of the New Deal - Investment Companies Act, deposit insurance etc.
- Glass-Steagal separating investment banking from deposit banking was in place until 2000

SImilar rules and regulatory frameworks have been adopted by the EU, by the UK within the EU framework, by Hong Kong, Sydney, Tokyo and other major markets.

The Crash and the Great Depression brought forward one wave of institutional response to the calamity. Deposit Insurance for example (but that also means you have to have bank regulation, inspection, regular reporting, capital values etc.). Not many (any?) serious people think a modern economy can do without deposit insurance - or that the 19th century and early 20th century period when it didn't exist was more stable.

The Global Financial Crisis of 2008-09 was a shock to the system whose impacts are still being felt. Clearly the deregulatory fervor of the 1980s and 1990s had gone too far - allowed the creation of edifices whose collapse threatened the whole economy.

Prudential Regulation in particular is now an important part of regulation. "Stress testing" of financial institutions against large asset price falls (housing, but not only). Maintenance of higher levels of capital. Opaque Over The Counter derivatives being forced to standard contracts and to work through Clearing Houses. The relevant department of the Bank of England is called, naturally enough, the Prudential Regulatory Authority. Reporting to the Financial Policy Committee, it analyzes the systemic risks, and oversees capital and other prudential regulation of the regulated firms.

The solution seems to be that of the New York skyscraper. They are designed by architects on commission and built by contractors - all driven by the market and profit motive. But there is a lot of regulation particularly around things like fire safety. What happened at Grenfell (80 dead in a UK high rise residential block, 18 months ago) couldn't happen, it appears, under New York fire codes. (never say never but the specific problems that lead to mass death at Grenfell Towers shouldn't happen under NYC codes).

Those fire codes are no doubt bureaucratic and contain flaws. They are also dynamic - they evolve over time. Most of the time, they work. Other than 9-11* I've not heard of a really bad NY skyscraper fire (one which spread to more than 1 apartment or hotel room) in recent history?

So my conclusion is:

- regulation is necessary particularly wrt the protection of consumers in financial services
- regulation has to adapt to changing circumstances
- regulation is necessarily imperfect and will always suffer from issues of bureaucracy & cost, failure to adapt to changing circumstances etc.

For me, very crude forms of safety mechanism seem important. Banks in the 19th century ran with 25% even 50% capital ratios, I see no reason why in the long run we cannot aim for high levels of capital (say at least 12-15% of capital, and pure equity not equity disguised as something else like Contingent Convertibles - US regulators better than European ones on this to my mind). And also restrict deposit-taking institutions from some sorts of financial activities - sometimes called "the utility model of banking".

I am not expert in the idea of "liquidity buffers" but in principle it seems a good idea to me, that financial institutions should have contingent sources of liquidity. And that law and regulation should be absolutely clear that a key role of Central Banks in a crisis is to provide liquidity to the markets.

* from a pure safety perspective there were undoubtedly flaws in WTC1 & WTC2. However my father was a civil engineer and his belief was, I think, that the structures stood the impact of what had happened surprisingly well (as they were designed to-- there were tests of the impact of a Boeing 707 when the buildings were designed) and that their fire performance was credible. Fundamental changes would have been needed in the design to increase the survival rate (basically no one survived above the 2 fire lines, as I understand it, although 90% or more did so below).

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Re: Bull market is over, run for cover says Alan Greenspan

Post by Valuethinker » Wed Dec 19, 2018 10:02 am

Jeff Albertson wrote:
Wed Dec 19, 2018 9:29 am
from the Economist, on Paul Samuelson's death:
As for Mr Samuelson's friend of 50 years, Alan Greenspan, once chairman of the Federal Reserve, “the trouble is that he had been an Ayn Rander”—a devotee of laissez-faire capitalism. “You can take the boy out of the cult but you can't take the cult out of the boy,” Mr Samuelson told the Atlantic this summer. “He actually had [an] instruction, probably pinned on the wall: ‘Nothing from this office should go forth which discredits the capitalist system. Greed is good'.”
Yet Mr Samuelson also understood that beyond the ivory tower the conditions necessary for efficient markets rarely existed; they needed regulating. “To understand economics you need to know not only fundamentals but also its nuances,” Mr Samuelson would explain. “When someone preaches ‘Economics in one lesson' I advise: Go back for the second lesson.” The latest crisis (for which he felt some responsibility, since he had helped develop financial derivatives that company executives did not understand) proved that “free markets do not stabilise themselves. Zero regulating is vastly suboptimal to rational regulating. Libertarianism is its own worst enemy!”
https://www.economist.com/finance-and-e ... -samuelson
Greenspan has also partly recanted. In Congressional testimony he said he was wrong to place pure faith in the self regulating abilities of markets. I believe he has also written something similar in his book on the crisis.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by 2015 » Wed Dec 19, 2018 3:50 pm

The best way to steal your life and your time from you is to make a fear-mongering pronouncement such as this. These people know exactly how to reel the public in.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by nedsaid » Wed Dec 19, 2018 3:55 pm

Elysium wrote:
Tue Dec 18, 2018 7:08 pm
The former fed chairman Alan Greenspan says about the current market "It would be very surprising to see it sort of stabilize here, and then take off"

He added that markets could still go up further — but warned investors that the correction would be painful: "At the end of that run, run for cover."

The former chairman also warned that the United States may be poised for a period of stagflation, "a toxic mix" when the economy suffers from high inflation and high unemployment. The last time the country experienced such an episode was in the 1970s and early 1980s.

Here is the link to news item:
https://www.cnn.com/2018/12/18/business ... index.html

Personally, I do not rate Greenspan very high at all, and think he is responsible for two bubbles forming on his watch, the late 90's tech bubble and the 2007-08 sub-prime lending crisis from his loose money policies fueling housing expansion.

Even if one thought he is credible, all market predictions should fall under the "no one knows nothing" category.
Well, many stocks are in bear market territory right now so he seems a bit late. I also recall his "irrational exuberance" speech, as I recall given about December of 1995 maybe 1996, to lazy to Google it right now. Point is, the markets continued to zoom a few years after his speech.

Also would note that my own record of market predictions isn't too good either.
A fool and his money are good for business.

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Re: Bull market is over, run for cover says Alan Greenspan

Post by F150HD » Wed Dec 19, 2018 5:41 pm

Valuethinker wrote:
Wed Dec 19, 2018 6:57 am
F150HD wrote:
Tue Dec 18, 2018 8:54 pm
read somewhere that Greenspan still uses Netscape Navigator. :confused
As far as I know that's not possible?

I used NN (and still sometimes call Firefox "Netscape").

But I don't think it will run on any hardware nor access websites correctly. (maybe there's an emulator mode you could use - as with old computer games, I do miss Steel Panthers!).
I was just kiddin. Didn't know how many would recall NN. :P
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averagedude
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Re: Bull market is over, run for cover says Alan Greenspan

Post by averagedude » Wed Dec 19, 2018 5:51 pm

Sure is alot of fear and pessimism about the stock market. That means 2019 should be a great year.

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MossySF
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Re: Bull market is over, run for cover says Alan Greenspan

Post by MossySF » Wed Dec 19, 2018 6:08 pm

If you feel this was true, what's then the action plan based on Greenspan's comments?

Sell off 50% of your stock and then buy back into the market on a 18-month DCA schedule starting 6 months from now?

(Although it would have been nicer to have this forecast in Jan-Aug when you could have sold at highs.)

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Re: Bull market is over, run for cover says Alan Greenspan

Post by garlandwhizzer » Wed Dec 19, 2018 7:22 pm

I think it's quite normal to feel anxiety about the market at a time like this when we've had a long and great bull run but are now seeing gathering clouds on the horizon. As far as predictions of what's going to happen in the future, they're all over the place--recession/deep bear market, stagflation, continued exuberant bull market, low but positive returns in stocks and bonds. You can choose to believe in whichever one fits your current emotional status. With such a wide disparity of predicted outcomes one thing that can be said with certainty: a great deal of uncertainty lies before us in the near/intermediate term. Markets do not like uncertainty. Furthermore they are discounting mechanisms which base today's prices more on what's expected in the next 6 months or so (economic slowdown? rate induced recession? trade war?, geopolitical crisis?) than on what's happening today (record low unemployment, inflation at target level, robust corporate profit growth in recent quarters). It is therefore no surprise that the direction of stock prices has been down in spite of the fact that the economy seems strong. Markets usually anticipate recessions and drop well before the recession starts, but sometimes they anticipate a recession which never occurs as the bull promptly takes off again. Another concern now: we no longer have the FED as our risk asset backstop (essentially zero rates, QE). We're now back to the way markets always were before these extraordinary monetary policies were instituted in crisis, policies which to my knowledge were never before done in the US or anywhere else.

I've been investing for more than 30 years and I cannot remember a time when there wasn't something, often something considerable, perhaps even frightening, to worry about in the market's near term future. Worry seems hard wired to investing, sometimes more than others but always there. I have no certainty at all about what's going to happen with the markets in the near/intermediate term. A portfolio of widely diversified equity plus high quality bonds has historically done pretty well through all the many troubles in the past for those who avoided panic selling. IMO it is likely to be a good choice today for the uncertain future that awaits us. Stay tuned.

Garland Whizzer

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nisiprius
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Re: Bull market is over, run for cover says Alan Greenspan

Post by nisiprius » Wed Dec 19, 2018 7:28 pm

F150HD wrote:
Wed Dec 19, 2018 5:41 pm
Valuethinker wrote:
Wed Dec 19, 2018 6:57 am
F150HD wrote:
Tue Dec 18, 2018 8:54 pm
read somewhere that Greenspan still uses Netscape Navigator. :confused
As far as I know that's not possible?

I used NN (and still sometimes call Firefox "Netscape").

But I don't think it will run on any hardware nor access websites correctly. (maybe there's an emulator mode you could use - as with old computer games, I do miss Steel Panthers!).
I was just kiddin. Didn't know how many would recall NN. :P
I made my first purchase from Amazon using Lynx. (Character-oriented web browser predating Mosaic, which predated Netscape Navigator).

Remember all of the sites that used blinking text, supported by a Netscape extension to HTML, so that they could say "Enhanced for Netscape?"

I was using Netscape Navigator before they introduced the "throbbing N."

(I am, however, considerably younger than Alan Greenspan).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

hightower
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Re: Bull market is over, run for cover says Alan Greenspan

Post by hightower » Wed Dec 19, 2018 7:44 pm

WanderingDoc wrote:
Tue Dec 18, 2018 7:29 pm
frugalecon wrote:
Tue Dec 18, 2018 7:19 pm
Alan Greenspan is 92. I recently saw him going into Neiman Marcus with his wife (Andrea Mitchell). He looked quite frail. He had a great run of being famous, but I don’t know why his views about financial markets are newsworthy now. Or at least actionable.
Must be doing well! :moneybag
He's 92 and walking into a department store with his wife? Yeah, he IS doing very well. At that age every one looks frail. Most of us on this forum won't live to see the age of 90. So, to even imagine being able to go shopping with my wife at 92, now that's real success.

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Elysium
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Re: Bull market is over, run for cover says Alan Greenspan

Post by Elysium » Wed Dec 19, 2018 8:15 pm

nisiprius wrote:
Wed Dec 19, 2018 7:28 pm
F150HD wrote:
Wed Dec 19, 2018 5:41 pm
Valuethinker wrote:
Wed Dec 19, 2018 6:57 am
F150HD wrote:
Tue Dec 18, 2018 8:54 pm
read somewhere that Greenspan still uses Netscape Navigator. :confused
As far as I know that's not possible?

I used NN (and still sometimes call Firefox "Netscape").

But I don't think it will run on any hardware nor access websites correctly. (maybe there's an emulator mode you could use - as with old computer games, I do miss Steel Panthers!).
I was just kiddin. Didn't know how many would recall NN. :P
I made my first purchase from Amazon using Lynx. (Character-oriented web browser predating Mosaic, which predated Netscape Navigator).

Remember all of the sites that used blinking text, supported by a Netscape extension to HTML, so that they could say "Enhanced for Netscape?"

I was using Netscape Navigator before they introduced the "throbbing N."

(I am, however, considerably younger than Alan Greenspan).
I have used Lynx for browsing, in fact was the only browser available (that I knew of anyway), before Mosaic and Netscape. I am considerably younger than you are (I think). I was an internet user before the invention of WWW, so there (telnet, ftp, uunet over tcp/ip).

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Re: Bull market is over, run for cover says Alan Greenspan

Post by LadyGeek » Wed Dec 19, 2018 8:41 pm

This thread has run its course and is locked (topic exhausted, derailed to discuss Mr. Greenspan - the person). See: Locked Topics
Moderators or site admins may lock a topic (set it so no more replies may be added) when a violation of posting policy has occurred. Occasionally, even if there are no overt violations of posting policy, a topic (or thread) will reach a point where the information content of the discussion has been essentially exhausted and further replies are much more likely to cause distress to the community than add anything of value.
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