Speak Truth to Powell

In August 2005, the Jackson Hole Economic Policy Symposium was to be the last for Federal Reserve Chairman Alan Greenspan, set to retire in January 2006. This was the occasion to pay homage to the luminary whose 15-year career spanned the ideological divide between Paul Volcker and Ben Bernanke.

Raghuram G. Rajan, the precocious chief economist of the International Monetary Fund, was asked to present a paper on how the financial sector had evolved under Greenspan’s tutelage. Rajan was aware of the solemnity of the occasion and knew that others would be breathless in their praise of securitization, deregulation, the emergent concept known as the “Greenspan put,” and other tools of financial creativity and exposition that were spawned during the maestro’s reign.

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It’s Time to Rediscover the Importance of Interest

Edward Chancellor, whose writings have graced this site on several occasions, is once again featured. From his Breakingviews column: “It’s Time to Rediscover the Importance of Interest.” The essay is a prelude to the August 16, 2022 release of his latest book, The Price of Time: The Real Story of Interest, which I highly recommend. The Kindle version is available on Amazon and can be preordered.


Inflation is back, and along with it a widespread obsession about the future direction of interest rates. This is hardly surprising. In the past, a dose of tight money has brought prices under control. However, interest’s role in ensuring price stability is just one of its many functions. Our neglect of those other functions explains why the financial markets are in such a jumpy state today.

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On Good Authority

For the many pundits masquerading as authorities, there are precious few whom time confirms as worthy of commendation. Edward Chancellor is one of them.

As the dot.com bubble relentlessly defied history, logic, and valuation’s gravitational pull through the late 1990s—the NASDAQ composite doubling from October 1998 to October 1999 and then, remarkably, doubling again from October 1999 to March 2020—the undersigned was in search of kindred spirits. A resolute contrarian, I remember voraciously consuming two books that leaned in solitary with me, as a David against the Goliath of the prevailing speculative winds. Those were Devil Take the Hindmost: A History of Financial Speculation (published on June 1, 1999) by Edward Chancellor and Irrational Exuberance (published on March 15, 2000) by Robert Shiller. The passage-of-time crucible revealed both authoritative books to be eerily prescient.

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The Perfect Storm 2.0

After a tumultuous start to 2022—the S&P 500 is down 13.3% and the NASDAQ has plummeted 21.1% as of April 30, to register the worst four opening months since 1939—the question on everyone’s mind and often lips is whether the meltdown is simply a correction in the grand secular bull market or something more ominous. My 2011 book, A Decade of Delusions, Chapter 9 (covering 2005 and 2006), describes the prelude of the Financial Crisis as a particularly violent storm arising from the confluence of a number of negative and unpredictable factors. Could the current volatility be a Perfect Storm 2.0 on the horizon?

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Capitalizing … on Casino Capitalism

Casino capitalism is the winning and losing of fortunes in the stock market. So wrote (and we paraphrase) John Maynard Keynes in his famous General Theory of Employment, Interest, and Money in the midst of the Great Depression (1936). He went on to warn about extremes:

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.

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More Than Surviving Uncertainty (Part II of II)

The Precedents

Beyond surviving the uncertainty of our fragile financial system, capitalizing on it requires a combination of unique traits. These include a deep, experience-based understanding of how businesses are valued; an uncompromisingly skeptical mindset; and emotional acrophobia (a condition in which high and rising prices cause acute discomfort). By contrast, high-price euphoria is the prevailing emotion—at least of the moment. This is one of those uncommon times in history that will once again prove the adage that it’s easier to make money than keep it.

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