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Greenspan's Bubbles: The Age of Ignorance at the Federal Reserve
No matter who you are-investor, trader, homeowner, 401(k) holder, or CEO-you are bound to feel the impact of Alan Greenspan's "Age of Ignorance" for years to come.
According to MSN Money columnist William A. Fleckenstein, Greenspan's nearly 19-year career as Federal Reserve Chairman is even worse than anyone imagined. Labeled "Mr. Bubble" by the New York Times, Greenspan was nothing less than a serial bubble blower with a long history of bad decision-making. His famous "Greenspan Put" fueled the perception of a Goldilocks economy-but, as this explosive expose reveals, the bear has finally caught up with Goldilocks.
Using transcripts of Greenspan's FOMC meetings as well as testimony before Congress, this eye-opening book delivers a timeline of his most devastating mistakes and weaves together the connection between every economic calamity of the past 19 years:
The stock market crash of 1987
The Savings & Loan crisis
The collapse of Long Term Capital Management
The tech bubble of 2000
The feared Y2K disaster
The credit bubble and real estate crisis of 2007
Fleckenstein explains just how far-reaching Greenspan's mess has been flung, and presents damning evidence that contradicts the former Fed chief's public naivete concerning shifts in the market and economy. He also points to a disturbing fact, that throughout his career, Greenspan not only made costly mistakes, but made the same ones-over and over again. And not only was he never able to recognize or admit to those mistakes, he constantly rewrote his own history to justify them.
Greenspan's Bubbles offers a lock-stock-and-barrel portrait of a flawed but fascinating man whose words and actions have led a whole generation astray, and whose legacy will continue to challenge us in the years ahead.
According to MSN Money columnist William A. Fleckenstein, Greenspan's nearly 19-year career as Federal Reserve Chairman is even worse than anyone imagined. Labeled "Mr. Bubble" by the New York Times, Greenspan was nothing less than a serial bubble blower with a long history of bad decision-making. His famous "Greenspan Put" fueled the perception of a Goldilocks economy-but, as this explosive expose reveals, the bear has finally caught up with Goldilocks.
Using transcripts of Greenspan's FOMC meetings as well as testimony before Congress, this eye-opening book delivers a timeline of his most devastating mistakes and weaves together the connection between every economic calamity of the past 19 years:
The stock market crash of 1987
The Savings & Loan crisis
The collapse of Long Term Capital Management
The tech bubble of 2000
The feared Y2K disaster
The credit bubble and real estate crisis of 2007
Fleckenstein explains just how far-reaching Greenspan's mess has been flung, and presents damning evidence that contradicts the former Fed chief's public naivete concerning shifts in the market and economy. He also points to a disturbing fact, that throughout his career, Greenspan not only made costly mistakes, but made the same ones-over and over again. And not only was he never able to recognize or admit to those mistakes, he constantly rewrote his own history to justify them.
Greenspan's Bubbles offers a lock-stock-and-barrel portrait of a flawed but fascinating man whose words and actions have led a whole generation astray, and whose legacy will continue to challenge us in the years ahead.
208 pages, Hardcover
First published January 1, 2008
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171 people want to read
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Displaying 1 - 19 of 19 reviews
October 26, 2008
The definitive (imo) destruction of the Greenspan myth --
(Woodward should be ashamed of himself for the book he wrote about A.G.)
(Woodward should be ashamed of himself for the book he wrote about A.G.)
July 22, 2024
A CHALLENGE TO THE PERSPECTIVE OF FORMER FED CHAIR AS A "MAESTRO”
William Fleckenstein runs a money management firm, and writes several columns. He summarized in the Introduction to this 2008 book, "Greenspan erred by continually picking an interest rate that was too low, then he solved the turmoil that resulted from that decision with ANOTHER period of interest rates that were AGAIN too low. The result was that, during his reign, the United States experienced a bubble in stocks and then in real estate... Prior to Greenspan's arrival at the Fed... the country had been bubble-free for over 50 years."
He argues that Greenspan's interest rate cuts overstimulated the financial markets, which encouraged baby boomers, AARP members, etc., to leave CDs and bonds and invest instead in the stock market, in "a desperate attempt on their part to replace the yields that had disappeared." (Pg. 15-16) He asserts that "Whether through cutting interest rates or giving speeches extolling the virtues of technology and productivity, he was no innocent bystander... Greenspan contributed to the bubble at every opportunity." (Pg. 49)
He suggests that job creation was weaker in this recent economic cycle because about 40 percent of the jobs created in the economic expansion were real-estate related; "for all intents and purposes, real estate WAS the economy after the stock market bubble burst in 2000." (Pg. 171) He concludes on the note, "Greenspan was no 'maestro'; he was the master of the United States' descent into financial turmoil." (Pg. 187)
Short and opinionated, this book is a stimulating "critical" perspective on Greenspan's tenure at the Fed.
William Fleckenstein runs a money management firm, and writes several columns. He summarized in the Introduction to this 2008 book, "Greenspan erred by continually picking an interest rate that was too low, then he solved the turmoil that resulted from that decision with ANOTHER period of interest rates that were AGAIN too low. The result was that, during his reign, the United States experienced a bubble in stocks and then in real estate... Prior to Greenspan's arrival at the Fed... the country had been bubble-free for over 50 years."
He argues that Greenspan's interest rate cuts overstimulated the financial markets, which encouraged baby boomers, AARP members, etc., to leave CDs and bonds and invest instead in the stock market, in "a desperate attempt on their part to replace the yields that had disappeared." (Pg. 15-16) He asserts that "Whether through cutting interest rates or giving speeches extolling the virtues of technology and productivity, he was no innocent bystander... Greenspan contributed to the bubble at every opportunity." (Pg. 49)
He suggests that job creation was weaker in this recent economic cycle because about 40 percent of the jobs created in the economic expansion were real-estate related; "for all intents and purposes, real estate WAS the economy after the stock market bubble burst in 2000." (Pg. 171) He concludes on the note, "Greenspan was no 'maestro'; he was the master of the United States' descent into financial turmoil." (Pg. 187)
Short and opinionated, this book is a stimulating "critical" perspective on Greenspan's tenure at the Fed.
March 2, 2018
Boring, yet informative. Greenspan was clueless or just didn’t care about his decision making.
May 15, 2023
The origin of Modern 'Moral Hazard' Central Banking
September 24, 2025
It reads like a diary of Greenspan’s biggest hater, and many Americans are justified in hating Greenspan. Just a descriptive note of what happened without much unique insight.
June 21, 2014
well, apparently, there have been many reviews on this book in which I am not getting into..my simple conclusions are i) author is really one stop short of calling Maestro's act as "systematic ignorance" by a) systematically ignoring the outside world b) systematically intend to reduce interest rates c) systematically to help the Wallstreet bankers and arbitrageurs making tons of dough d) systematically intend to create high tech, and housing bubble like Japan part deux ii) it is so obviously that there, although not the point from this book, 911 event was possibly created in the right time. Yes, 911 was a hoax that we do not want to get into from this review that iii) systematically in line to create many wealth bubble which ultimately to suck dry within the middle classes. iv) systematically following "plans" (Bilderberg) to destroy middle classes and the global wealth..along with the slogan of NWO..v) the pattern from his behavior is appalling and pure insane..it is no longer a book about the conventional wisdom on how the hack US Congress, Senate did approve this guy who screwed up in LTCM and not even, not even close, as an economists..there are too many obvious absurd behavior and events which are too difficult to explain. Pure abnormal. Eg: His obsession with productivity, his repeated not-mention of bubble, his repeated lowering I.R move (1994, 1996, 2003, etc), his obvious giveaways of hot money to Wall Street bankers. Most insanely, Maestro was telling the critics he did not know about the CDO, Alt-A, MBS, ABS instruments that was going on after he flipped the systematic Greenspan Put switch on???And one tells me it is difficult to get into Harvard, then someone tell me how this dude got this Fed (private companies (bankers)) job???? And what I see is people (public) love his fetish speech about the most blurrish comments about the forthcoming economic conditions (past)..are people simply love being verbally, and intelligent abused by the moronic Maestro??
June 14, 2009
I wish I had read this book in 2008. I would have moved my money out of mutual funds. This book blames much of what has happened in the last few years on Alan Greenspan's inability to to handle the market bubbles, and explains just how far his mess has been flung. "A stock market bubble exists when the value of stocks has more impact on the economy than the economy has on the value of stocks." Many stocks had been valued at such amazing amounts as 1/10th of the US economy. Not possible, but speculators kept this bubble going and Greenspan did nothing about it. He was still pushing investing in technology in 2000. Many uninformed invested on margin without sufficient limits (which he had the right to impose) and lost everything. His claims of US productivity were completely false when actually there was no growth other than in the computer hardware sector from 1995 to 1999. Considering how the numbers for GDP and productivity growth are calculated, and the fact that the Fed chairman was using the opinions of the analysts to base his opinions on the condition of the markets, I don't know how one could believe anything the Fed says. With the failure of technology growth, the Fed goes on to housing as its new economic driver, with housing prices going sky high, encouraging ARMs and sub-primes and again the bubble bursts; it is the beginning of the end for us. Surprise, surprise, the dollar has lost over 92% of its purchasing power since 1908 as a result of inflation. The book discusses our debt, Greenspan's input into the housing problem and the irresponsible and fraudulent lending practices, the expanding public debt and the decline in the value of the US dollar. It is a revealing read.
This entire review has been hidden because of spoilers.
June 11, 2010
Before you pick up Alan Greenspan’s latest memoir, The Age of Turbulence, it may be a good idea to get your hands on this title first.
Greenspan’s Bubbles is an obvious reference to the recent economic calamities which have been blamed on the former Federal Reserve Chairman. It serves as a blistering anti-thesis to the Maestro’s policies over the decades which the authors have pointed out as the main reasons why America and its people are in so much economic trouble today.
Much of the book concentrates on the recent technology bubble that gripped investors early this decade. In a blow-by-blow narrative fashion, the authors have detailed very carefully numbers and events that led to the speculative bubble and how they tie in with the Fed’s fiscal incompetence. This includes the Federal Reserve’s oversight in injecting liquidity into the market at a time when people were irrationally exuberant – to borrow a term that Greenspan coined himself. There is also a chapter on the very recent sub-prime mortgage crisis and the property bubble.
The work is relatively short and can be read cover to cover in less than a day. Nevertheless it makes for an intriguing read and offers a very different view of the man who everyone else is singing praises for.
Greenspan’s Bubbles is an obvious reference to the recent economic calamities which have been blamed on the former Federal Reserve Chairman. It serves as a blistering anti-thesis to the Maestro’s policies over the decades which the authors have pointed out as the main reasons why America and its people are in so much economic trouble today.
Much of the book concentrates on the recent technology bubble that gripped investors early this decade. In a blow-by-blow narrative fashion, the authors have detailed very carefully numbers and events that led to the speculative bubble and how they tie in with the Fed’s fiscal incompetence. This includes the Federal Reserve’s oversight in injecting liquidity into the market at a time when people were irrationally exuberant – to borrow a term that Greenspan coined himself. There is also a chapter on the very recent sub-prime mortgage crisis and the property bubble.
The work is relatively short and can be read cover to cover in less than a day. Nevertheless it makes for an intriguing read and offers a very different view of the man who everyone else is singing praises for.
August 28, 2016
I remember the days when Greenspan was considered a wizard and guru by most, but at the time I knew little of finance. I compare Greenspan to the Wizard of Oz, and while Fleckenstein and Sheehan do not use that title, they do make clear it would be appropriate. This book is short and to the point, but is lacking in background material on finance theory for the uninformed reader.
It is mostly devoid of obfuscating jargon except for the many quotes from Greenspan. Those quotes are hilarious in retrospect, at least for those who were not badly hurt by the Fed's actions during Greenspan's tenure as Chairman. Now I don't feel so bad about not really understanding them, because they were largely bullshit.
The graphs, critical to illustrating major points, were not well done. While they were relatively clean of chart junk, they were poorly labeled in some cases, and did not use semi-log plots for money versus time trends, both of which made it more difficult to understand the graphs quantitatively. I note these faults are so common in the finance business that they conform to a "standard", but the "standard" is deceiving.
It is mostly devoid of obfuscating jargon except for the many quotes from Greenspan. Those quotes are hilarious in retrospect, at least for those who were not badly hurt by the Fed's actions during Greenspan's tenure as Chairman. Now I don't feel so bad about not really understanding them, because they were largely bullshit.
The graphs, critical to illustrating major points, were not well done. While they were relatively clean of chart junk, they were poorly labeled in some cases, and did not use semi-log plots for money versus time trends, both of which made it more difficult to understand the graphs quantitatively. I note these faults are so common in the finance business that they conform to a "standard", but the "standard" is deceiving.
Read
January 21, 2016When reading this book along with watching the Oscar winning movie Inside Job, one truly gets clear visibility into the Fed's actions that sustained the 2000 - 2002 recession to the 'Great Recession of 2008 -2010'.
I have read Bill's columns on MSN, and this book was an easy quick read as well. Fleckenstein does a great job of documenting Greenspan's comments and the impact they had on the markets that led to all major market corrections of the past 20 years during Greenspan's tenure. It is no wonder that the US economy cannot create jobs for the majority of the population.
This book can help an individual learn more about how the Fed impacts the investment environment as well.
I have read Bill's columns on MSN, and this book was an easy quick read as well. Fleckenstein does a great job of documenting Greenspan's comments and the impact they had on the markets that led to all major market corrections of the past 20 years during Greenspan's tenure. It is no wonder that the US economy cannot create jobs for the majority of the population.
This book can help an individual learn more about how the Fed impacts the investment environment as well.
August 27, 2009
Greenspan was the Chairman at the Federal Reserve for most of my adult life. I've seen the tech bubble and the housing bubble happen and just thought it is just the way it is. I've learned from the book that it didn't have to be that way. In fact, Greenspan had the responsibility and power to provide stability to the American economy which he chose not to exercise. He is to be blamed for the incredible spending spree that America went on. According to Bill Fleckenstein, Bernanke is no different from Greenspan. I need to rethink our family's investment strategy.
April 9, 2010
Pretty good book. From reading this book, it sounds like Greenspan really didn't have any idea what he was doing while he was fed chief. Some of this book was a little hard for me to understand, but it still explained well greenspan's role in the current economic crisis.
June 24, 2008
Fleckenstein is a brilliant market commentator, but this book is poorly done. Unfortunate, given his capabilities.
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October 14, 2008Pretty good book sort of spells out why we are in the credit perdiciment we are in now. Looks like Mr greenspan didnt have all the answers .
November 11, 2008
Want to know how we got in this economic mess? It all started here.
June 2, 2016
Alan Greenspan - not a fan
April 24, 2012
Very interesting considering the subject matter.
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January 26, 2019I have the english and the german edition.
Displaying 1 - 19 of 19 reviews