Greenspan’s investments pay offgreenspun.com : LUSENET : Unk's Wild Wild West : One Thread
Greenspan's investments pay off Fed chairman's conservative portfolio avoids stock losses
WASHINGTON, Aug. 8 — Federal Reserve Chairman Alan Greenspan, who once famously worried about “irrational exuberance” in the stock market, demonstrated last year that a conservative approach to investing can pay off.
GREENSPAN'S PORTFOLIO, heavily invested in safe Treasury securities, avoided the big losses suffered by many stock investors, according to his annual disclosure form, released Tuesday by the Fed.
The federal disclosure form does not require a listing of exact values for assets held, only ranges. Greenspan's assets begin in the less-than-$1,000 category and top out with one asset valued at between $1 million and $5 million.
If Greenspan's assets are valued at the maximum level, they totaled $9.6 million at the end of 2000, up from a maximum $7 million at the end of 1999.
Even at the low end of the valuations on the disclosure form, Greenspan's statement showed that he managed to pretty much hold his own, with investments valued at $3.1 million at the end of the year, compared with a low-end valuation of $3.4 million in 1999.
The Dow Jones industrial average fell by 6.2 percent last year, its first loss in a decade, while the technology-heavy Nasdaq composite index lost 39.3 percent of its value, its worst annual loss in history.
Greenspan's investments are concentrated in Treasury securities, considered the world’s safest investment since the U.S. government has never failed to pay investors who hold its bills, notes and bonds.
These holdings also allow Greenspan, often referred to as the most powerful economic policy-maker in the world, to avoid conflicts of interest which could arise if some companies fared better than others on the basis of his interest-rate decisions.
By investing in the safety of U.S. government securities, Greenspan also avoids the ups and downs of the stock market.
In December 1996, Greenspan wondered aloud whether it could be determined when investors were in the grip of “irrational exuberance” that was causing them to bid up stock prices to levels not justified by underlying fundamentals.
Markets around the world initially plunged on those comments, but investors soon shrugged off the worries to push stock prices much higher. The market began plunging in early 2000 as the Fed was pushing interest rates up to cool off an overheated economy. While Greenspan does not own stocks, his wife, NBC reporter Andrea Mitchell, does, according to the disclosure form, which requires a listing of a spouse's assets.
Mitchell owns stock in General Electric, the parent company of NBC, as well as Estee Lauder, Clorox, H.J. Heinz, Kimberly Clark, McDonald's and Rubbermaid among others. Her biggest single holding, listed in the category of $250,001 to $500,000, was in Abbott Laboratories. (MSNBC is a Microsoft-NBC joint venture.)
The disclosure form also shows that Mitchell earned $72,500 for giving five speeches last year to groups ranging from Sweet Briar College to the Jewish Community Center of Richmond.
-- (M@rket.trends), August 08, 2001
so the fucking bastard takes it upon himself to destroy the economy *in order to fight inflation* which was absolutely no where to be found..... what a maggot!
-- RESIGN ALAN (greenspan@world_class.asshole), August 09, 2001.
Ah yes, the economically illiterate. The cost of energy wouldn't have any effect on inflation, now would it?
Stick to trying to make change correctly.
-- J (Y2J@home.comm), August 09, 2001.
A downturn was going to happen sooner or later after all of the speculative fever of the late '90s. The rate hikes of 1999 and the first half of 2000 (meant to cool the fever) have led to it being sooner.
If the fever had broke a year or two later, the downtown would probably have been worse.
We're just now at the end of an expansion that lasted for 10 years--a length not matched at any other time in the last 150 years. The longer expansions go on the more "imbalances" (such as debt) build up in the economy.
Let's hope Alan Greenspan can keep this recession from becoming very deep. Cutting interest rates doesn't mean much though to those businesses who've apparently decided they already have most of the telecom and computer equipment they need for the time being.
-- (email@example.com), August 09, 2001.
Q&A: What caused the US slowdown?
-- (BBC@news.item), August 09, 2001.
"J" is going to be proven partially right here. Cost of energy is a big factor, always has been, always will be.
Greenspan, shmeenspan. Bill Clinton just got $10 mill for his account of his career, I'd like to read what Greenspan has to say about the Clinton years, and his take on his own influence.
I think that if his judgement is sound, he would probably say that both of their achievements (and failures) were overated, and their efforts were given more signifigance than deserved. The market is it's own animal.
-- Bemused (firstname.lastname@example.org), August 09, 2001.