Greenspan is still the Maestro?
Sorry, the other thread has all the ideas I would make. Higher interest rates solve one part of the problem, but predatory/stupid loans will be made, Wall Street will make risky bets and not understand the risks, etc. 7%-8% interest rate might be high enough to cause a "growth recession," if we are lucky. Higher rates will certainly pop it sooner, but you risk a recession. Increasing the reserve requirement for banks might make a difference, but I do not know if the investment banks are covered by it. Greenspan could do a mid-meeting 0.5 rate increase, citing bubble conditions. That might cause Wall Street to reconsider its bets. 2 warnings, though. If my last idea backfires, I would expect an Oct 1987 repeat, and 2, some hot shot trader might still try a new derivative to regain the profit. I wonder if this earlier contraction might spark the euro crisis earlier? Last thought, Greenspan has a better reputation, and perhaps Rand as well?
