Remarks

Well, I didn't watch it, and I don't have a transcript. But I do have the trusty (recently re-designed) LA Times and they printed Greenspan making this remark yesterday:

“If we are right 60% of the time in forecasting, we’re doing exceptionally well. That means we are wrong 40% of the time. We can try to do better, but forecasting…never gets to the point where it’s 100% accurate.”

I wish I could be right 60% of the time at my job and not get fired.

Greenspan, I Love You

You can't make this stuff up.


Greenspan denies blame for crisis, admits 'flaw'
Thursday October 23, 6:49 pm ET
By Martin Crutsinger and Marcy Gordon, Associated Press Writers
Greenspan badgered by lawmakers, denies blame for crisis but concedes 'flaw' in his thinking

WASHINGTON (AP) -- Badgered by lawmakers, former Federal Reserve Chairman Alan Greenspan denied the nation's economic crisis was his fault on Thursday but conceded the meltdown had revealed a flaw in a lifetime of economic thinking and left him in a "state of shocked disbelief."

Thank You Mr Greenspan

Well I guess you can say a lot of people saw this coming, but I doubt many people really thought it would fall so far so fast. Whereas Dow 8,000 seemed pretty implausible a week ago, if we get a repeat of today tomorrow, we are below 8,000.

Cnbc had a rather interesting article on Greenspan which I will link. I'll also paste a few of the genius remarks below for those who are too lazy to click the link. I think in the end there will be a camp of people who argue that the current state of the economy is 100% Greenspan's fault, and a camp of people who think that the current state of the economy is only 98% Greenspan's fault.

cnbc Greenspan Article

"Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004

“I believe that the general growth in large institutions have occurred in the context of an underlying structure of markets in which many of the larger risks are dramatically — I should say, fully — hedged.”

Predictions Revisited

Well it's been, what, forever since I've even looked at my blog. But on another day where the Dow falls +500 points it seems ripe for commentary.

Then I look at my last post, where I handed out some advice. Some of which appears to have been good, but some was horrible. Had I checked in a few months ago I would have recommended getting out of energy (and in fact I did get out).

However, the post is dated May 30, so let's see the results, were you to take the advice.

Your best bet would have been short on VLO or TSO for a 55% gain. However you would have lost even more had you gone long on CHK. Looks like all the banks and hedge funds had to ditch out on energy.

So what now?

You can't beat cash in the bank. Gold seems to be bouncing back but is still a bit of a crapshoot.

Short selling, once it comes back, might be a good idea. In the meantime don't be surprised if tech continues to see some downside as the gloom spreads.

I'd go long GLD or DGP.
Short anything financial or tech (Puts on QQQQ not a bad choice these days).

Oh, and all those people who say you should ride it out are either idiots or getting rich off of your ever-shrinking retirement fund...