Roger Lowenstein is the author of five books covering financial markets. His latest book, The End of Wall Street, was published in April. Mr. Lowenstein is also the author of an excellent biography on Warren Buffett written in 1995 which we reviewed previously. In an article for the Washington Post today, Mr. Lowenstein makes the case for more timely intervention by the Federal Reserve when financial market bubbles are forming. Read this article for a brief excerpt and more commentary.
In an interview with The Financial Times, Jeremy Grantham discusses a study on various financial bubbles that his firm has recently completed. Mr. Grantham found 34 examples of bubbles that fit his definition as a “forty year event” statistically. Of these 34 bubbles, 32 have moved back to trends prior to the bubble forming. The two bubbles currently outstanding are the U.K. and Australian housing bubbles which Mr. Grantham believes are driven by low rates on floating rate mortgages. Read this article for more details and a link to the interview.
Former Federal Reserve Chairman Alan Greenspan testified today in Washington before the Financial Crisis Inquiry Commission. We suggested last week that Mr. Greenspan and others who failed to foresee the crisis should simply accept responsibility and play a role in helping society learn from past mistakes in an effort to prevent similar problems from taking place in the future. While Mr. Greenspan now admits that he was only correct “70 percent of the time”, he continues to minimize the role of monetary policy in the crisis. Read this article for more details and a brief video clip of Jack Bogle’s view of Mr. Greenspan’s testimony.
Perhaps no other government policymaker has suffered as much reputational damage due to the housing collapse as former Federal Reserve Chairman Alan Greenspan. Mr. Greenspan has defended his record in recent months and recently published a paper outlining his views regarding the housing bubble and subsequent crash. In Mr. Greenspan’s view, Fed policy actions had little to do with the crash. Read this article for more details and a link to Michael Burry’s recent New York Times op-ed article.