central punters

[James Farmelant]

Alan Greenspan's behavior appears to be perfectly logical
when we view him as the chief guardian of the interests
of financial capital in the US.  His rationales are if course
illogical since on the one hand he spouts free market ideology
to oppose government regulation of hedge funds but at the
same time he has been promoting government intervention
to bail them out (since they are "too big to allow to fail").
What this show is the blatant hypocrisy of the bourgeoisie.
On the one hand they will spout to the cows come home 
meo-liberal ideology (and Greenspan was a top disciple
of Ayn Rand) yet when it is their own money at stake they
are more than willing to have Uncle Sam step in to help
bail them out.

		Jim Farmelant

On Fri, 02 Oct 1998 16:02:08 -0400 "Charles Brown"
<CharlesB at CNCL.ci.detroit.mi.us> writes:
>Doug,
>
>Am I wrong in thinking that Greenspan's
>rationale is illogical ? How is it "risktaking"
>if when you fail, you don't lose ? 
>Isn't the "risk" that you might lose ?
>
>Charles 
>
>>>> Doug Henwood <dhenwood at panix.com> 10/02 8:53 AM >>>
>[from the Lex column of today's Financial Times - a longer story on 
>the
>Bank of Italy's investment in LTCM isn't on the FT's web site]
>
>"Risk-taking is a necessary condition for wealth creation." Thus spake 
>Alan
>Greenspan, justifying the Federal Reserve's role in the rescue of 
>Long-Term
>Capital Management, the beleaguered hedge fund. Fair enough. But who 
>should
>be taking the risks and creating the wealth? Surely not central banks
>themselves. Yet that, unbelievably, is the latest skeleton to come 
>rolling
>out of LTCM's closet. The Bank of Italy has sheepishly admitted to 
>having
>handed over $250m of its foreign exchange reserves to LTCM - $100m as 
>an
>investment, $150m by way of a loan.
>
>The bank claims the investment provided valuable market intelligence. 
>That
>stretches credulity. Cynics would note instead that LTCM was betting
>heavily on
>the convergence of Italian bond yields towards those of Germany, a
>development the bank doubtless welcomed.
>
>But even if it were true, at what price? By putting money into a 
>highly
>speculative vehicle, whose  activities affected the operation of 
>Italy's
>own markets, the central bank has forfeited its moral authority. How 
>then
>can it act efficiently  as a central bank or regulator? If Italians 
>were to
>conclude that they  had been offered carte blanche to take risks, it 
>would
>ill behove the Bank of Italy to tell them otherwise.
>
>
>
>

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