00:00What did you say to the graduate students this week about Alan Greenspan?
00:04Well, first of all, Tom and Lisa, I'm delighted to be here with you today.
00:10There's so much to say about Alan Greenspan, and so much has already been said.
00:15There were two personal episodes that I had with Alan, and both of them left me smiling when I thought
00:23about it.
00:24And let me discuss the first one, which is the more recent one.
00:28And not that long ago, just a handful of years ago, Alan published a book that he had co-written
00:35with Alan Woodridge from The Economist about capitalism in the United States.
00:42And it was so incredibly sharp.
00:46They asked me to moderate the panel, and the discussion with him at that point was right on topic.
00:54And to your point, one of his concerns had to do with budget deficits and also Social Security.
01:01I look at Alan Woodridge's work with our editor-in-chief, John Micklethwaite, and it is that hoarse historical construct.
01:07The Greenspan critics will say he got wrong regulation.
01:12Did you perceive that while sitting at Goldman Sachs?
01:14When I met with Alan and other members of the FOMC, I did talk about the regulatory aspect.
01:22And the thing that was interesting to me is that they were well aware of some of the problems that
01:27were developing in the housing market, for example, and in the subprime credit market.
01:32And that was his biggest concern.
01:35Now, the so-called irrational exuberance speech, which so many people think was about the stock market,
01:41I had met with him just a few days before.
01:43I think that speech was largely about fixed income markets.
01:47He was concerned, for example, about the inadequate risk premia in corporate bonds.
01:53He was also concerned about the inadequate risk premia in sovereign markets outside the United States,
01:59particularly for some of the smaller, newer countries that had not yet established themselves or established their credibility.
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