Greenspan comments: "China's market good for another 2000 points at least"
Well, no. He didn't really say that.
But his comments were enough to tank the thinly traded, pre-holiday markets in the US, taking them from nicely up for the day to flat to down.
The bigger question is this: Why does anyone still pay attention to the former Fed Chair? His forecasting acumen has proven to be awful, and his influence of Federal Reserve policy is now gone. Is this merely a cult of personality? I don't get it.
Former U.S. Federal Reserve Chairman Alan Greenspan warned Wednesday that there's going to be a "dramatic contraction" in Chinese equities and that the current surge on the Chinese stock market is unsustainable, according to media reports. In recent weeks, a number of financial firms, including Goldman Sachs, as well as Governor Zhou Xiaochuan of the People's Bank of China have expressed concern about the possibility of a bubble forming in the Chinese stock market. The Shanghai Composite Index, which tracks shares listed on the larger of China's two stock exchanges, has gained 56% year-to-date.
Is there anyone who doesn't think the Chinese markets are bubblicious?
The bigger questions are whether or not Chinese policymakers have lost control of the economy. Or, as Nouriel Roubini asks, are they unwilling to use the tools they have?
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Maybe not. Our rich invest there. Must be smart money, right????
(Besides, average Americans are keeping our economy going w/out money from the rich. Average American capitalists don't need wages, they're in the investing class with their leveraged gov't backed, mortgage debt money)
It's a perfect system!!!!
Posted by: John Thompson | May 23, 2007 3:39:59 PM
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