Talk:Greenspan put/Archive 1

Archive 1

September 2008

"The end result has been said by some to be moral hazard in risk taking and successive bubbles from equities to credit to real estate, and possibly to commodities (although it's too early to tell)."

I'd like to change 'commodities' to 'the dollar.' The put creates a bubble in the dollar value, not commodities. To say it is a bubble in commodities implies that the price of commodities will eventually come crashing down, which isn't really consistent with the sentence (if moral hazards made goods cheaper, it wouldn't be very hazardous). The (possible) bubble is in the dollar, and the flight to commodities is the dollar bubble bursting, not a "commodity bubble" opening.

I'll probably change it soon if there are no objections. —Preceding unsigned comment added by 98.217.251.188 (talk) 05:15, 19 September 2008 (UTC)

Some Thoughts

'Greenspan Put' is a colloquial term, not a formally recognized term in economics. 'Greenspan Put' simply means monetary intervention and does not refer only to rate easing. The goal of monetary intervention was not, in the latest crisis, or for that matter ever, to repeal the business cycle and prevent asset deflation. The goal of monetary policy, whenever it has been implemented, has been to simply make the economy better. Monetary intervention by Bernanke prevented further erosion of the U.S. economy and was therefor of benefit and therefor a success. —Preceding unsigned comment added by 98.143.107.61 (talk • contribs) 04:56, 7 November 2010

Your recent edit is dangerously close to NPOV, esp. without a citation. You removed the cite needed template as part of this edit; please don't do that unless you add a source. I've put the template back; hopefully someone can find a good ref for the assertion. -- B.S. Lawrence (talk) 17:44, 8 November 2010 (UTC)

When did it end?

First sentence: "... from the late 1980s to the middle of 2000". Later, "The Fed did so after ... the 9/11 terror attack...." Contradictory, no? B.S. Lawrence (talk) 15:49, 24 March 2009 (UTC)

True, but the article extensively discusses the 'Bernanke' Put... Could be fixed a little. — Preceding unsigned comment added by Dan Rayn (talk • contribs) 11:32, 18 January 2011 (UTC)

Jargon

I'm not an economics major and I certainly can't understand half of what this article says. It's full of jargon and would take a substantial amount of research to begin to understand. What ever happened to http://en.wikipedia.org/wiki/Wikipedia:Make_technical_articles_understandable ? 64.203.7.201 (talk) 07:14, 29 October 2010 (UTC)

I agree. It's not written well. If the reader is wondering, why is it called a Greenspan *put*, this article doesn't explain that at all. If I understand the term, it's used because traders use put options to hedge downside risk, and the greenspan "put" is similar in that it limits downside risk. But it's not literally a put option… (Sorry if I do this wrong, I don't comment on Wikipedia very often.) Mehaase (talk) 05:14, 24 September 2011 (UTC)

Did Greenspan buy MBSs while he was in charge of FED?

Hi,

I was writing an article on Greenspan and read this:

"After the collapse of the Internet bubble, Greenspan amended the tools of the Greenspan put to focus on buying mortgage-backed securities, as a method of more directly stimulating house price inflation, until that market collapsed in the Global Financial Crisis and Greenspan retired."

However, the sources that link to this claim don't say anything about Greenspan buying MBSs after the dot com bubble, and when I created a post on AskEconomists at Reddit to ask if they knew about such a strategy, no one could point to such a practice: https://www.reddit.com/r/AskEconomics/comments/13nbe51/did_greenspan_buy_mbss_while_he_was_in_charge_of/ 109.181.14.42 (talk) 14:54, 21 May 2023 (UTC)

I don't think Greenspan bought MBS directly (as Bernanke did in 2009), but per the LTCM bail-out, Greenspan lent money to Wall Street (indirect QE), for them to buy MBS (as Powell did in 2020, and as Powell is doing now in the market). 78.18.235.247 (talk) 15:18, 21 May 2023 (UTC)

Pre Bernanke and the sub-prime crisis, most of the Fed's injection of liquidity was via loans (or repos) to Wall Street, and JPM as the Fed's bank in Wall Street (e.g. the only major bank in the western world on a P/B of over 2x). 78.18.235.247 (talk) 15:20, 21 May 2023 (UTC)

Yes, there are lots of examples of Greenspan providing liquidity to US ibanks as indirect QE “, which I’m sure he did in 2002. The biggest channel was Greenspan’s explicit funding of the GSEs (Freddie Mac) to buy MBS, which was the real “put” in 2002/03. 31.187.2.189 (talk) 15:44, 21 May 2023 (UTC)