i want to take you back to a clip of alan greenspan testify before congress in 2008 about what happenedwent wrong and how surprised he was. he said those of us who look to the self interest of lending institutions to protect equity are in disbelief. we got it wrong in other words. fast, david powell in 2021 -- we are trying to understand the risks they are running and understand the systems. this would be a failure on that front. is it just me or is that the same clip a couple decades apart? matt: absolutely. but the good news is they are a couple decades apart. i can understand the shock at the archegos losses, the fact that so many different banks were willing to give this guy who already made deals for wire fraud and insider trading so much leverage and put it on their balance sheets, but it is not the kind of thing that happens terribly often, which is why it was such a big story to begin with. also because of the massive numbers that came along with it. terms of losses -- with it in terms of losses. amanda: it gets to the heart of what many investors wonder about -- is the system s

are we wet into a measured incremental approach that alan greenspan invented? michael: i don't think so. this is a new paradigm so we are not sure exactly what the reaction function will be once they achieve the outcomes. in other words, the thought is it will take a long time to achieve their outcomes they view as likely. however, suppose they are wrong and they achieve it much faster. it will have to react much as her. let's say in 12 months time, next summer, we see inflation is not returned back to 2%, still 2.5% and likely to stay there into 2023, the fed has said, 2.5% is too high and they will start reacting. i think they will have to react quicker because of the lagging economy. tom: can i point at jonathan ferro, currencies have barely budged? jonathan: and we add credit to the situation, too. equity start to break down and we start busy big cracks in credit. did you see any cracks in credit yesterday? michael: not really. there is an avalanche of supply coming to the market in terms of the companies issuing debt. we thought there might be lower supply

go ahead caleb well part of the rise of neo liberal economics milton friedman and iran and and alan greenspan was pushing this notion that any invoked by the government in the economy is. by definition socialism and leading to communism and a lot of americans believe that if they pay taxes that is socialism a lot of americans believe that the post 'd office is socialism but all capitalist economies have state actors and state government spending to some degree or other and yet have paved roads you know to facilitate people going and shopping at capitalist stores and the notion that any state sector is somehow somehow communism and we should get beyond it that was introduced in the united states during the 1970 s. really we saw the rise of this kind of economic thinking and his lead to big economic problems look at the united states crumbling infrastructure i mean the rust belt you know economic u.k. you know we've got a system of prisons for profit military contractors i mean we're seeing receding neo liberal free market extremism right to its logical conclusion in the united states and i thi

know, i feel like with all due respect to all of the smart members of the fed, they are making alan greenspan easy to understand. we get a comment from somebody in the fed every day and the smartest minds i talk to say we don't know what is going on. nobody has any idea of what transitory means nobody believes it do you think inflation is here to stay? when i say to stay, michael, i mean for the next few years. not forever. >> right now, we are in the powell camp right now. the main reason for that, the powell camp thinks inflation is transitory there are two big reasons for that one, at some point in the next 6 to 12 months, we will hit peak growth and profits once you hit that, we think inflation will cool down and the economy continues to open up the other thing is we look at the powerful ds. debt, demographics and debt demographics this is a cocktail of policy and fiscal stimulus along with the vaccine. we think the trends will start to reduce themselves as we go through the next several months. >> what do we do what are we buying what are we owning or selling? >> over the past several ye

it takes you back to alan greenspan, irrational exuberance. memory that?emember a couple -- raymond are that? -- remember that? we could see spillover from u.s. monetary tightening shock. so the world's eyes are on the fed. we just might not get anything at this particular meeting. alix: mike, thanks very much. speaking of the fed, you have st. louis that president james bullard speaking at a virtual event, saying the u.s. has a big economic boom going on, it wouldn't be surprised if 2021 gdp estimates would be about six .5%. these are really big numbers, and we are seeing that in the consumer guys from yesterday, for example, or target today. guy: bullard is at one end of the spectrum in terms of what he is expecting, but certainly the data is in the short term. this is why we need to know what the fed thinks in terms of timing because the cycle appears to be accelerating away from everybody at the moment in terms of what we are seeing with the economy. 2021 gdp estimates, six point 5%. how much do we pick up from there? this whole process seems to be acc

sees remarkable exuberance in markets these days, which obviously takes us old guys back to alan greenspan'srrational exuberance. we remember what happened a few years after that. do you see any parallels to today's markets, to asset prices? pres. bostic: i do not spend a lot of time worrying about asset prices, but i will say there is a lot of drive that is driven by profits and profitability. we have seen this through the pandemic period. the markets are speaking for themselves. there is a lot of reason to be optimistic about how the economy will progress and we will have to see whether the bed that investors are making gets worn out for the next several months. michael: the ecb went on to say that spillover from equity pricing could be substantial. you take into account the effect u.s. markets could have on other economies around the world when you're considering policy? pres. bostic: we are the u.s. central bank so we primarily focus on the impact of our policy on the united states. it is the case that in a global economy the effects of our policies on businesses and investors worldwide

alan greenspan warned before covid at budget deficit levels of $1 trillion, he was saying we had to bringry budget deficits under control. history tells us it will be in more rapid rates of price increases than we have seen. so we might see this -- this whole covid situation might be a trigger rather than a cause. at the same time you have the chinese demographic changing. he saw the report. the slowest growth since 1953. china is no longer able to keep prices down across the world, because costs are rising and they have these demographic challenges. you have other debt challengers and other countries deteriorating. it is a bit of a perfect storm for inflation to be more consistent than most people think at the moment. haslinda: martin, given what you have just described, is it tom for a pullback -- time for a pullback? should we be as enthusiastic about stuff in the second half? martin: that is an excellent question. we saw last week already stocks being generally wobbly. people say, well, if inflation goes up there is the chance the fed might tone down stimulus rates go up, then dividen

alan greenspan, this political hack, whose appointed to replace the paul voelker, the first thing heet cracker archdiocese crashes. ben bernanke takes over and jay powell what does he do, he inherits a rate-rising program from janet yellen and he presses right ahead with it right into all of these people including trump saying don't do it. is it a coincidence that all these newly-installed fed chairman chose to raise rates? maybe it is, but there might be something to be said that the fed values its independence so much that there's a temptation on the part of the new chairman to prove themselves to their colleagues and to the markets by leaning to the hawkish side. neil: interesting. i love the piece, greg always love your writing and incites and you're right. the trend has been for a new president to essentially go with the fed chief appointed by a prior president, of course donald trump broke that mode but we'll see. always good seeing you have a great weekend. >> thank you, neil. take care. neil: all right, greg ip. in the meantime here you know what's getting to be really big ri

the phrase alan greenspan uttered in 1996.e was right the market did not crash until 2001 it had years to play out before that crash what might you factor in the economy and from the fed watcher perspective? what do you think about the comments >> i think the fed is acknowledging the concern that many have with such excessive monetary policy and on top of the tremendous amount of fiscal policy the risk of asset with the stock market or housing or generally commodity prices the rise of rising asset prices exist. the fed is trying to show they are watchful more overwhelming has been the comments from fed officials continuing to under score and they will be patient they are in no hurry to reverse course or begin thinking about taking away an accommodation i think comments like this give the markets cause. i think strong data will be the most unsettling for markets. even with the fed saying they will be patient. if we get the numbers that aneta was looking at or what we are looking at over the course of the year, you will see mark

remember, alan greenspan coined the phrase irrational exuberance in november 1996, 3 years before theof the market. i think it's actually a little helpful to have the animal spirits. maria: all right, we will leave it there. hank, interesting to know that the ten-year yield is back and up this morning. up almost a point right now in yield. hank smith, we will keep watching all of that. great to see you, thank you so much. hank smith joining us with the ten-year 9.58%. next hour the president's defense of the tax and spending plans. pennsylvania congressman dan is here with his take. summer housing surge, how you can find the best deals and save deals for your next vacation. plus it is job's friday, 8:30 a.m. attorney. we have all hands on deck, breaking everything that you need to know with special coverage beginning at 8:00 a.m. eastern. don't miss a moment of it. you're watching mornings with maria live on fox business. ♪ ♪ ♪ i went from sleepless nights to getting my money right. so thank you. ♪ ♪ ♪ na na na na ♪ na na na na... ♪ hey hey hey. ♪ goodbye. ♪ na na na na... ♪ hey hey h