Thought some of you might enjoy this...

From Bill Fleckenstein's "The Contrarian": Alan Greenspan: friend or foe?

Alan Greenspan outdid himself in his speech Monday in Boston. He entitled it, "The Revolution in Information Technology," although I call it "An Ode to Technology." Quite frankly, in my opinion, it completely embraced the new era and what wonderful things technology could do for us. I found myself disagreeing with many different points that he made, and agreeing with very few, other than the obvious that technology is wonderful and it's made our lives better.

In my opinion, in his speech Greenspan has confused technology with the bubble, the very same bubble that he has created. He has in essence been reading the stock prices and doesn't realize what he has wrought. In a Rap I wrote in early January, I had a piece about Alan Greenspan inventing the Internet. I noted that since the fall of 1998 he printed copious amounts of money, and then last year when he should have been tightening, he panicked and printed even more money because of Y2K concerns.

This fomented a bubble and money naturally flowed to the stocks with the most imagination. That centered on the Internet and other Internet-oriented ideas, as there was a lot of imagination potential and few facts. Those stocks did the best and the leaders of those companies were deemed to be visionaries, and whatever they proclaimed was therefore to be the future. What Greenspan has basically done is believe the action on the tape and the proclamations by the companies, and has decided that the Internet and technology have truly revolutionized everything in the most unique way.

The flaw in this analysis is that technology has been revolutionizing the world for a very long time, and that does not allow one to pay absolutely stupendous prices to sales ratios, price-to-earnings ratios, etc. The Fed has fomented a bubble, and now the Fed has used the results of that bubble to justify the fact that things are more or less on course...

-- DeeEmBee (macbeth1@pacbell.net), March 08, 2000

Answers

Watched about 10 minutes of his speech to some bankers this morning. It is amazing how he can talk for so long and say so little. Gist of the speech (which is discussed in other threads) seemed to be "it is not wise to make bad loans." I'm stunned.

Arthur Leavitt, on the other hand, is not mincing words. Dude is PO'd about analyst and trader behavior and other chicanery and he sounds like a man who's fixin' to put a hurt on some folks real soon now. More power to his elbow, say I.

-- DeeEmBee (macbeth1@pacbell.net), March 09, 2000.

Greenspan,another one of those Individuals,inept,unskilled Labor infesting all of our Institutions,Government at all Levels,hired by other Nitwits,belonging to the same Clan.These discriminatory hiring Practices have been going on for a long Time.This is why we are ,who we are,a Nation of Liars,Thieves,War and Greedmongers, despised by anyone,who still has a Thread of Decency left in this"progressive"World.

-- Salus (hello@world.RUawake), March 09, 2000.