Greenspan und Komptenz - 2

verfasst von jagg, 31.01.2001, 18:37

Zitiert aus 2tfme23 von Vern Lyon,
http://www.aros.net/~vlyon/ bzw.
ftp://ftp.aros.net/pub/users/vlyon/2tfme12.txt
...
III. Failed Forecaster Finally Gets it Right

I have previously mentioned in TFME that if one can manipulate
the market then one can predict it. I did this in the context of
discussing the role of competition and the Efficient market
Hypothesis by using the example of the attempt to manipulate the
copper market by a Mr. Hamanaka of the Sumitomo Corporation of
Japan. Unfortunately for Sumitomo Mr. Copper, as he was known in
the copper trade failed big time in his manipulation of the
copper market and ended up costing his firm many millions of
dollars as the forces of competition were too much for Sumitomo's
highly leveraged copper positions to withstand a significant
adverse move.

What is interesting is that there is another big operator in the
financial markets whose prestige is more like that of Mr. God,
rather than Mr. Copper. This individual is considered to be such
a wizard with the numbers that even when he, to quote Murray
Rothbard,"is a nerd with the charisma of a wet mackerel, [and
when he speaks he] drones on in an uninspired monotone," he is
considered an economic genius. This individual is none other than
Alan Greenspan, the chairman of the Federal Reserve Board.

Interestingly it turns out that when Greenspan was trying to make
it in the competitive private sector that he was a failure and as
many economists before him have done he decided to go into the
political business, of which he has been an amazing success.

I remember when he had an economic consulting firm, but the only
reason I knew this is that his political success brought him to
my attention, and reporters would often refer to him as a
principle in the prestigious Wall Street consulting firm of
Townsend-Greenspan. However, the firm might have been
prestigious, it was a failure as far as providing competent
economic forecasts. The late Professor Murray Rothbard, who knew
Greenspan over 30 years ago when they were both members of Ayn
Rand's cult in New York City wrote the following, which is
consistent with what I remember from my following Greenspan's
career as just an interested economist. Rothbard wrote this in
1987 upon Greenspan's being appointed chairman of the Fed.

The press is resounding with acclaim for the accession to Power
of Alan Greenspan as chairman of the Fed; economists from
right, left, and center weigh in with hosannas for Alan's
greatness, acumen, and unparalleled insights into the
"numbers."
...
The astute observer might feel that anyone accorded such
unanimous applause from the Establishment couldn't be all good,
and in this case he would be right on the mark. I knew Alan
thirty years ago, and have followed his career with interest
ever since.

I found particularly remarkable the recent statements in the
press that Greenspan's economic consulting firm of Townsend-
Greenspan might go under, because it turns out that what the
firm REALLY sells is not its econometric forecasting models, or
its famous numbers, but Greenspan himself, and his gift for
saying absolutely nothing at great length and in a rococo
syntax with no clearcut position of any kind.

As to his emergence as a forecaster, he ruefully admitted that
a pension-fund managing firm he founded a few years ago just
folded for lack of ability to apply the forecasting where it
counted: when investment funds were on the line. [p. 293,
Making Economic Sense, Auburn, Alabama, 1995].

Now that Greenspan is Fed chairman he has the help of innumerable
Fed economists is"divining" the numbers, but when Nobel
laureates, such as Milton Friedman, are unable to accurately
predict future economic conditions, it is more likely that
Greenspan's great competence lies in another area, and in fact
might have more to do with being Fed chairman than in being Alan
Greenspan, although the fact that Greenspan takes himself
seriously as a forecaster certainly adds to his"usefulness."
However, it is the fact that the Fed is the monopoly supplier of
(high powered) money into the market system that makes Greenspan
such a powerful individual.

IV, Politics and Central Banking

Having a central (monopoly) bank control the supply of money,
however, is not the only way to"run" a market economy. Today
there is even significant academic discussion of what is called
"Free Banking," where banking is treated like any other business,
and while the United States' monetary history shows many periods
of monetary instability this did not prevent the US from
achieving great economic success prior to the formation of the
Fed in 1913.
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gesamter Thread:

• Hat die FED ein Interesse an stabilen Finanzmärkten, will Sie die Talfahrt - Aldibroker, 30.01.2001, 20:56
  • Er will sicherlich keinen neuerlichen Gipfelsturm, dann wird's nämlich gefährl.. - YIHI, 30.01.2001, 21:02
    • Was ist denn nun gefährlich, das die Märkte fallen oder ein 1/x wieder aufholen? (owT) - Aldibroker, 30.01.2001, 21:05
      • Re:... gefährlich für wen? - jagg, 30.01.2001, 21:14
        • Re:... gefährlich für wen? - dottore, 30.01.2001, 22:23
          • Re:... gefährlich für wen? - jagg, 30.01.2001, 23:25
            • GS und Komptenz - 1 - jagg, 31.01.2001, 18:34
            • Greenspan und Establishment - jagg, 31.01.2001, 18:35
              • Greenspan und Establishment, Nachtrag - jagg, 31.01.2001, 18:46
            • Greenspan und Komptenz - 2 - jagg, 31.01.2001, 18:37
            • Diskussion der GS Rede an December 5, 1996 - jagg, 31.01.2001, 18:42
            • Greenspan und"Macht" - jagg, 31.01.2001, 18:52
  • Re: Hat die FED ein Interesse an stabilen Finanzmärkten, will Sie die Talfahrt - JüKü, 30.01.2001, 21:28
    • Worum geht es? (owT) - Aldibroker, 30.01.2001, 21:37
      • darum was er kann und das was passieren wird. nervensäge (owT) - puppetmaster, 30.01.2001, 21:59
        • Entschuldige, suche nur Antworten und will mich weiterentwicklen, nehme - Aldibroker, 30.01.2001, 22:07
        • 'nervensäge' ist aber kein schöner Ausdruck!! (owT) - ufi, 31.01.2001, 12:50