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I came to a stark realization: chronic surpluses could be almost as destabilizing as chronic deficits.

Alan Greenspan

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Alan Greenspan
Age: 98
Born: 1926
Born: March 6
Banker
Economist
Entrepreneur
Jazz Musician
Politician
New York City
New York
Deficit
Realization
Surpluses
Almost
Destabilizing
Came
Deficits
Starks
Stark
Chronic
Surplus

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The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War.
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When trust is lost, a nation's ability to transact business is palpably undermined.
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Indeed, better risk management may be the only truly necessary element of success in banking.
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Fear and euphoria are dominant forces, and fear is many multiples the size of euphoria. Bubbles go up very slowly as euphoria builds. Then fear hits, and it comes down very sharply. When I started to look at that, I was sort of intellectually shocked. Contagion is the critical phenomenon which causes the thing to fall apart.
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If I've made myself clear, I've misspoken.
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The free lunch has still to be invented.
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I do not deny that many appear to have succeeded in a material way by cutting corners and by manipulating associates, both in their professional and in their personal lives. But material success is possible in this world and far more satisfying when it comes without exploiting others.
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But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?
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We cannot rule out a situation in which a preemptive policy tightening becomes necessary, ... Such caution seems especially warranted with regard to the sharp rise in equity prices during the past two years. These gains have obviously raised questions of sustainability.
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I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.
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If we are to remain preeminent in transforming knowledge into economic value, America's system of higher education must remain the world's leader in generating scientific and technological breakthrough, and in meeting the challenge to educate workers.
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Deficit spending is simply a scheme for the confiscation of wealth.
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The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.
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There is no evidence that the business cycle has been repealed.
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Regulators have not been able to achieve the level of future clarity required to act pre-emptively. The problem is not lack of regulation but unrealistic expectations. What we confront in reality is uncertainty, some of it frighteningly so...
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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.
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Look, I'm very much in favor of tax cuts, but not with borrowed money. And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day that proves disastrous. And my view is I don't think we can play subtle policy here.
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Any informed borrower is simply less vulnerable to fraud and abuse.
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I was a good amateur but only an average professional. I soon realized that there was a limit to how far I could rise in the music business, so I left the band and enrolled at New York University.
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Institutions of the newer participants in global finance had not been tested, until recently...recent crisis have underscored certain financial structure vulnerabilities that are not readily assuaged in the short run.
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