A Quote by Alan Greenspan
In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending.
Related Quotes
Consumer spending is now plunging at serious-recession rate ... even if the rescue now in train succeeds in unfreezing credit markets, the real economy has immense downward momentum. In addition to financial rescues, we need major stimulus programs.
In the 40 years I've been working as an economist and investor, I have never seen such a disconnect between the asset market and the economic reality... Asset markets are in the sky, and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.
The current system is organized around financial values over life values. We need to shift that locus of power down to the community level because the financial markets recognize only money and thereby only financial values.
I think the government lost control over fiscal policy in UPA-2. But it is possible to suggest that the momentum of the populism of UPA-1 did the damage when the economy slowed down, but government spending could not.
The lack of monetary discipline has become a hallmark of unfettered globalization. Central banks have failed to provide a stable underpinning to world financial markets and to an increasingly asset-dependent global economy.
We live in a very risky world and investors should not get "carried away" with excessive allocations to equities, or for that matter, real estate. As always asset allocation and low cost and broad diversification will be essential in earning one's fair share of whatever returns our financial markets are generous enough to bestow upon us.
To restore confidence in our markets and our financial institutions so they can fuel continued growth and prosperity, we must address the underlying problem. The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy.
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
Well, as you know, we're working through a difficult period in our financial markets right now, as we work off some of the past excesses. But the American people can remain confident in the soundness and the resilience of our financial system.
By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative - supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.
The crisis in Europe has affected the U.S. economy by acting as a drag on our exports, weighing on business and consumer confidence, and pressuring U.S. financial markets and institutions.
Within a few months in 2008, household finances were crushed as asset values fell, millions of jobs were lost, countless credit cards were canceled, and thousands of homes were foreclosed on.
Any onset of increased investor caution elevates risk premiums and, as a consequence, lowers asset values and promotes the liquidation of the debt that supported higher asset prices, ... This is the reason that history has not dealt kindly with the aftermath of protracted periods of low risk premiums.
Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science.
The crisis in Europe has affected the US economy by acting as a drag on our exports, weighing on business and consumer confidence and pressuring US financial markets and institutions.
No country can be complacent in making sure that excessive debt of the household doesn't create excesses and weaknesses in the financial system. Everything is interconnected.
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