Thursday, October 20, 2011

The Beginning of the "Bubble Economy": 10/18/87

Barry's place has an entry from Art Cashin which memorializes 10/18/87.

It was a huge crash of the Dow; Greenspan was traveling, and when he got off the plane, an aide told him that 'Dow's down 500.'  Greenspan first mis-understood, thinking that it was "5."

But when he realized what happened, he ran the printing-presses at flank speed--inserting vast sums of cash into 'the system,' which sums sloshed around to being the "dotcom" bubble, and later the "housing" bubble.

The parody-poem is pretty damn good, too!

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