Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

ET in FT: Greenspan's 'extremism'

by Migeru Wed Mar 19th, 2008 at 05:29:30 AM EST

FT.com: Letters - We should reject this extremism of Greenspan's (March 19 2008)

From Mr Jérôme Guillet.

Sir, It was oddly fitting that Alan Greenspan should argue in favour of continued self-regulation of the financial sector ("We will never have a perfect model of risk", March 17) on the very day that self-regulation demonstrated its absolute failure, as the only solution to avoid complete market panic and collapse was seen to be public intervention in the form of massive Fed guarantees over Bear Stearns liabilities.

The rest is behind a subscription firewall, but you can read it after the fold...


After denying for years that there was any asset bubble, Mr Greenspan now describes it in excruciating detail, and concludes that it was inevitable, because it is the very nature of financial markets to be occasionally irrational, and to engage in booms and busts. Such a (correct) assessment would seem to be a call for much stricter regulation of how the financial world can be allowed to play with other people's money to limit such cycles. Instead, his insistence that nothing of the kind should be done is an extraordinarily explicit call to privatise financial profits (during the boom) and socialise losses (in the aftermath). As such, it should be treated with all the respect that political extremism deserves; ie, none.

Jérôme Guillet
Editor
European Tribune

Display:
The letter is behind a subscription firewall at the FT, and Jérôme is (as of today) behind a content-filtering firewall at work.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 05:31:53 AM EST
what did they do?

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Wed Mar 19th, 2008 at 05:39:26 AM EST
[ Parent ]
Websense.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 05:41:00 AM EST
[ Parent ]
oh man.

it might not be that bad though, depends on setup.

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Wed Mar 19th, 2008 at 05:42:40 AM EST
[ Parent ]
It would appear his bank is stepping up its "operational risk" procedures.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 05:45:10 AM EST
[ Parent ]
What does that mean?

By the way, it always feels great when we get into the FT. And it's the first time anything I have affected gets into the FT too (changing from "extremist" to "extremism". ;)

It actually feels... great. The intertubes is wondrous.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Mar 19th, 2008 at 05:54:52 AM EST
[ Parent ]
It's a joke on the idea that employees browsing the intertubes is an operational loss to the company.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Wed Mar 19th, 2008 at 06:01:45 AM EST
[ Parent ]
If bankers in Paris are allowed to browse blogs and use the googles, what'll we tell the children?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 19th, 2008 at 12:15:10 PM EST
[ Parent ]
for today, at least... We'll see if it holds in the coming days.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Mar 19th, 2008 at 12:15:23 PM EST
[ Parent ]
I've updated the post to the story, now.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Mar 19th, 2008 at 03:18:21 PM EST
[ Parent ]
Noce job everyone, starting of course with Jerome!

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Wed Mar 19th, 2008 at 05:38:51 AM EST
Well done to the Sorcerer and his Apprentices.

Concise and to the point: something that could never be said of Mr Greenspan...


"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Mar 19th, 2008 at 06:24:50 AM EST
I concur

And on the congrats too.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Wed Mar 19th, 2008 at 06:12:41 PM EST
[ Parent ]
I don't understand the rationale behind putting LTEs behind the subscription firewall - except as a way to lessen the publicity of criticism...

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Wed Mar 19th, 2008 at 09:05:06 AM EST
Best part of the paper.
by Colman (colman at eurotrib.com) on Wed Mar 19th, 2008 at 09:47:48 AM EST
[ Parent ]
Better than the comedic genius of Greenspan's incoherent rambling?  I beg to differ.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Wed Mar 19th, 2008 at 12:13:33 PM EST
[ Parent ]
Always the best part of every corporate-media outlet.  It's kind of amazing, when you think about it, that they still run LTEs.
by keikekaze on Wed Mar 19th, 2008 at 04:23:35 PM EST
[ Parent ]
not a very efficient solution, but hey it's available...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Wed Mar 19th, 2008 at 10:29:06 AM EST
Congrats on the LTE! Another notch in the ol' belt... Someone should find and forward it to Greenspan's email box.

I have a UMTS capable phone and unlimited internet access for  €25/month. I can connect my mac laptop to the internet via bluetooth (or with the USB cable) from the phone; it works great, especially for blog reading, except, of course, Fri. Photo blog...

If you have the same or similar capabilities, you could hook up a personal laptop to the cell phone connection. Do you have the ability, or the desire, to bring your own laptop to the office? Or, are you considering this a positive maneuver by the IT department? Get some more work done and all that?

By the way, there are also cool programs that allow you to type text-messages into the keyboard and send them to the phone via bluetooth. I hated text messaging until I found this program called BluePhoneElite 2 (it also allows you to answer incoming and make outgoing calls using the laptop's speaker and microphone).

by gioele (gioele(daught)sandler(aaaattttt)gmail(daught)kom) on Wed Mar 19th, 2008 at 11:17:08 AM EST
[ Parent ]
Maybe this is not the appropriate post to ask this, but I do not understand why is everybody speaks of "massive guarantees" or even bail-out. We are talking about 30 billions, which is a lot of money for us but nothing compared with the sums they have already poured in the market or with the potential liabilities of Bear Sterns. And more, this is money loaned to JP Morgan not to Sterns so, unless I am missing something, they will lose this money only if JP Morgan too goes under.

It seems to me that this looks more like a semi-nationalization.

by Deni on Wed Mar 19th, 2008 at 12:10:58 PM EST
the loan to JPM is non-recourse, collateralized solely by the net asset value of BSC. So that would essentially be a "garantie de passif" in french law, dunno the equivalent name in english, provided by the tax payer. And we don't know the exact cap on the garantee, the quoted 30 B$ is only a minimum.

So there is absolutely no doubt this is a bailout.

Pierre

by Pierre on Wed Mar 19th, 2008 at 12:15:00 PM EST
[ Parent ]
The Fed is guaranteeing TO JPMorgan that it will not lose money from BSC's liabilities - ie the Fed directly takes the risk of all the skeletons that can be found in BSC's books, instead of JPMorgan.

The liquidity injections of the recent past, while they are subsidies of sort, are at least loans to banks that are still, in principle, able to pay them back, and would wipe our these banks' shareholders if claimed.

JPMorgan shareholders are taking little risk in this case. The Fed should have gotten some shares in JPMorgan to back that guarantee.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Mar 19th, 2008 at 12:18:30 PM EST
[ Parent ]
We should have gotten billions of $ worth of shares before we did this-if anybody gave a damn about anything other than bailing out the wealthy.

"I said, 'Wait a minute, Chester, You know I'm a peaceful man...'" Robbie Robertson
by NearlyNormal on Wed Mar 19th, 2008 at 04:48:22 PM EST
[ Parent ]
Thanks for writing this and congratulations for it gettig published.

It was unexpected and great to read it in the FT yesterday.

by Almanax on Thu Mar 20th, 2008 at 03:06:40 AM EST
I could not get my hands on it yesterday and would very much like to have a scan of the page, if you (or anyone else) could provide it!

Thanks.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Thu Mar 20th, 2008 at 05:10:18 AM EST
[ Parent ]


Display:
Go to: [ European Tribune Homepage : Top of page : Top of comments ]