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We may be in a rapidly evolving international financial system with all the bells and whistles of the so-called new economy. But the old-economy rules of prudence are as formidable as ever. We violate them at our own peril.

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
Economy
Peril
Called
Prudence
May
Bells
Ever
Evolve
Whistles
Financial
Violate
International
Formidable
Rules
Evolving
System
Rapidly

More quotes by Alan Greenspan

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In general, corruption tends to exist whenever governments have favors to extend, or something to sell.
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In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
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The use of a growing array of derivatives and the related application of more-sophisticated approaches to measuring and managing risk are key factors underpinning the greater resilience of our largest financial institutions... Derivatives have permitted the unbundling of financial risks.
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Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. Protection of the consumer by regulation is thus illusory.
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I don't know where the stock market is going, but I will say this, that if it continues higher, this will do more to stimulate the economy than anything we've been talking about today or anything anybody else was talking about.
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Excessive optimism sows the seeds of its own reversal.
Alan Greenspan
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This decade is strewn with examples of bright people who thought they built a better mousetrap that could consistently extract abnormal returns from the financial markets. Some succeed for a time. But while there may occasionally be mis-configurations among market prices that allow abnormal returns, they do not persist.
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History has not dealt kindly with the aftermath of protracted periods of low risk premiums.
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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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The gut-feel of the 55-year old trader is more important than the mathematical elegance of the 25-year old genius.
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Deficit spending is simply a scheme for the confiscation of wealth.
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By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives.
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Revolutions are something you see only in retrospect.
Alan Greenspan
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Anyone willing to do what is required to become president of the United States is thereby barred from taking that office. I'm only half joking
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It has been my experience that competency in mathematics, both in numerical manipulations and in understanding its conceptual foundations, enhances a person's ability to handle the more ambiguous and qualitative relationships that dominate our day-to-day financial decision-making
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Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.
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The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.
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Without calling the overall national issue a bubble, it's pretty clear that it's an unsustainable underlying pattern.
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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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The true measure of a career is to be able to be content, even proud, that you succeeded through your own endeavors without leaving a trail of casualties in your wake.
Alan Greenspan