Alan Greenspan Market Quotations

signs of froth in some local markets where home prices seem to have risen to unsustainable levels.

We don't look at stock prices and say, 'If they are rising we have to raise interest rates,' ... To the extent that the stock market affects the economy, we will respond to that.

I recognize that there is a stock market bubble problem at this point, ... and I agree with Governor Lindsey that this is a problem that we should keep an eye on.

Nowhere in the world are the synergies of small and large businesses operating side-by-side in a dynamic market economy more apparent than in this country.

Let me say this anyway on the record: We do not and have not been targeting stock prices for the purposes of endeavoring to stabilize this economy, ... We react if and when stock market price changes impact on the economy. We respond to the economy.

Despite the tightest labor markets in a generation, more workers report in a prominent survey that they are fearful of losing their jobs than similar surveys found in 1991 at the bottom of the last recession, ... The marked move of capital from failing to technologies to those at the cutting edge has quickened the pace at which job skills become obsolete.

...In an economy that already has lost some momentum, one must remain alert to the possibility that greater caution and weakening asset values in financial markets could signal or precipitate an excessive softening in household and business spending,

The markets are demanding that we change outdated statutory limitations that stand in the way of more efficiently and effectively delivering financial services to the public, ... The Federal Reserve agrees and urges prompt enactment of financial modernization legislation.

I realize what that does to competitiveness, but that's the way markets work efficiently. In other words, to prevent the exchange rates from moving creates all sorts of distortions.

For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum .

Much fiscal policy is implemented, not through spending increases, but through tax credits and other so-called tax expenditures. The markets should respond to them as they do spending cuts, with little contraction in economic activity.

It's only when the markets are perceived to have exhausted themselves on the downside that they turn. Trying to prevent them from going down just merely prolongs the agony.

What is not clear is whether the market values that are being placed on particular assets involved in this technology revolution are appropriately priced.

To date, interest-sensitive spending has remained robust and the FOMC (Federal Open Market Committee) will have to stay alert for signs that real interest rates have not yet risen enough to bring the growth of demand into line with that of potential supply, even should the acceleration in productivity continue,

History has demonstrated that implicit in any removal of power from central planners and broadening of market mechanisms -- as would occur under WTO -- is a more general spread of rights to individuals,

We don't endeavor to manipulate the bond market to act as a proxy, ... The major reason is we wouldn't know how.

The Federal Reserve has responded to the balance of market forces by gradually raising the federal funds rate over the past year, ... Certainly, to have done otherwise -- to have held the federal funds rate at last year's level even as credit demands and market interest rates rose -- would have required an inappropriately inflationary expansion of liquidity.

I'm sorry I used that term. It's one which does suggest a froth in the market place. I would hesitate to use it in today's context.

Because it is difficult to suppress growing market exuberance when the economic environment is perceived as more stable, a highly flexible system needs to be in place to rebalance an economy in which psychology and asset prices could change rapidly,

Until market forces, assisted by a vigilant Federal Reserve, affect the necessary alignment of aggregate demand with the growth of potential aggregate supply, the full benefits of innovative productivity acceleration are at risk of being undermined by financial and economic instability,

The effects of the present merger wave are yet to be determined, ... But, unless a relationship between bigness and market concentration can be more firmly rooted in anti-competitive behavior, bigness, per se, does not appear to be an issue for national economic policy.

It is possible to get markets which are too tight, which create inflationary imbalances and ultimately undercut the recovery,

difficult to suppress growing market exuberance when the economic environment is perceived as more stable.

Indeed only such highly liquid portfolios would be consistent with (government-sponsored enterprises') mission of providing primary mortgage market liquidity during a crisis, particularly a financial crisis,

Indeed, only such highly liquid portfolios would be consistent with (government-sponsored enterprises') mission of providing primary mortgage market liquidity during a crisis, particularly a financial crisis,

The impressive performance of the U.S. economy over the past couple of decades, despite shocks that in the past would have produced marked economic contractions, offers the clearest evidence of the benefits of increased market flexibility,

A gradual reduction over time of the GSE portfolios should be a non-event to investors and market participants, other than GSE shareholders,

At some point, labor market conditions can become so tight that the rise in nominal wages will start increasingly outpacing the gains in labor productivity, and prices inevitably will then eventually begin to accelerate,

I think that the market is ultimately driven by real forces, ... Once you get a decline started, it's not clear whether people use that as a reason to sell or buy.

The very few times which we have intervened have occurred, ... when we believe the markets are unstable and that intervention might have an impact.

Without the needed restrictions on the size of the GSE balance sheets, we put at risk our ability to preserve safe and sound financial markets in the United States, a key ingredient of support for housing,

Such developments apparently reflect not only market dynamics but also the all-too-evident alternating and infectious bouts of human euphoria and distress and the instability they engender,

Such an increase in market value is too often viewed by market participants as structural and permanent, ... To some extent, those higher values may be reflecting the increased flexibility and resilience of our economy.

Surely difficult challenges lie ahead for the Fed, some undoubtedly of our own making, and others that will be thrust on us by market or other forces,

Investing a portion of the Social Security trust fund assets in equities as the administration and others have proposed would arguably put at risk the efficiency of our capital markets and, thus, our economy,

I have gotten calls from a number of senior high-tech executives who are telling me that the market is dissolving rapidly before their eyes. But I suspect that a not inconceivable possibility is that what is dissolving in front of their eyes is their own personal net worth!

The more flexible an economy, the greater its ability to self-correct after inevitable, often unanticipated disturbances, ... The impressive performance of the U.S. economy over the past couple of decades, despite shocks that in the past would have surely produced marked economic contraction, offers the clearest evidence of the benefits of increased market flexibility.

Throughout all this history, the CEA has, in most cases, provided the president with the best economic advice available at the time and has, crucially, been a consistent advocate for the importance of market forces,

Had the failure of LTCM triggered the seizing up of markets, substantial damage could have been inflicted on many market participants, including some not directly involved with the firm, and could have potentially impaired the economies of many nations, including our own,

The critical issue should be how to strengthen the legal base of free market capitalism: the property rights of shareholders and other owners of capital, ... Fraud and deception are thefts of property.

It is important to remember that most adjustment of a market imbalance is well under way before the imbalance becomes widely identified as a problem,