alan greenspan was forced to admit the u.s. economy was not growing as fast as he had assumed it would earlier in the year. in fact, he conceded it wasn't going at all. it had paused. it was greenspan who warned the president that the economy was so fragile that even a 50% increase in the price of oil might be enough to take the economy back into recession with the risk of government failures there's and bank collapses. in the oval office that day, greenspan explained to the iranian about her zahedi that there was so much chaos in the financial system that the lending flexibility of the big banks had vanished and financial networks around the world were stretched thin. he added that the huge increase in debt taken on after 1973 when oil consumers had tried to borrow their way out of the fiscal hole they found themselves in had badly shaken the confidence of markets, governments and big business. it was essential he said that the shah of iran share restraint on oil price. when i first read that transcript now more than four year

alan greenspan jacked up interest rates. he was chairman of the federal reserve for seven years and those supposedly riskless debt based on derivatives turned bad. procter and gamble, you think they are smart financial officers, you would think so. they didn't know what they were doing. they got conned by wall street. a bank called bankers trust co. lost $300 million. orange county, california where san diego is lost $1 billion and the controller went to jail for a little while. big crisis. wall street was in trouble. wasn't well advertised but there was a far bigger crisis in the later years. we had far east asian financial crisis in 1997. a russian financial crisis in 98. that famous hedge fund in new york, long-term capital management went under and the authorities started to bring all of wall street down and we had the high technology fantasies driven by if not greed i don't know what else where these people who underwrote these high technology stocks made $4 or $5 on every $100 of stock they sold. one fantasy after anot

the second half of 1976, the greenspan pause. the u.s. economy was not growing as fast as he had ascended with earlier in the year. barrett, he conceded, it was not going in all. it was greenspan who won the president that the economy was so fragile even a 15% increase in the price of oil must be enough to tip the u.s. economy in the economies of its trading partners back into recession with the rest of government failures and bank collapses. in the oval office that day greenspan explained that oil prices have caused so much chaos in the international financial system that the lending flexibility the big bang said banished and financial mccourts across the world stretch than. he added the huge increase in debt when oil consumers had tried to borrow their way out of the fiscal hole with found themselves than have badly ship in the constant -- confidence of markets, governments and big business. essential that we show restraint. when i first read that transcript more than four years ago in a full year-and-a-half i was perplexed. in fact, i

you're absolutely correct because greenspan more than anybody politicize the process because he was basically at the end of the day a political person he was a very poor economist everybody agrees that it was a very poor economist and he basically knew how to keep the bankers happy his constituency was always the bankers from eighty seven on with every time the banks had a problem to cut interest rates and blow the system with money and that created this huge debt to a large degree so you can get off that but i think you've got to break that nexus i agree with that you see thing i was thinking of the wall street protests purser piri would like to go down there or join them because remember he was the one railing about the fact that the fed was basically should be tried for treason but i think should be tried for treason so perhaps he should lead the charge of a couple there has been a lot of chatter along those lines is there a role for a federal reserve bank it's a relatively in america a correlation restarted as a way to get away from the bank of england bank right and made the st

the great tragedies of the looting neoclassical economists from new colony is that as usual alan greenspan of late have been making jump in and rescue the financial sector and expectantly and charging to continue lending or to find another class a part of it was the lens so a driver stock will cost that much and that's why i think we're in such a big crosses because with no i don't think i'd better have probably human history a period where the level of private debt has been so much in the annual income and your annual production of the economy so we've got not just say a major cross not just on to the great depression but i think probably in the history of humanity will looking back will notice on a period when it was hurt and so on and fundamentally it wouldn't have got if it wasn't for all the rescues of straight will have been a q and greenspan so you ultimately that kid is the economic leader is very nice period of bringing the modern world to the worst point with regards to debt. yeah and the integration is the good german speaking that ignores this is that this is our irony if you w

ok one thing to point out i'm sure you're listening to alan greenspan because you see the face of austin goolsbee he is obama's former chair of the council of economic advisers he looked a little confused and a little leery i'm not trying to imagine what he was thinking but it's enough for you to tell that this kind of money can run into some problems because with the out money remember the government stamp is what provides the value and that's so when you keep the printing presses rolling you don't have to be a rocket scientist to figure out what happens to the value of this you keep on going to long and the country can and that's not with this but with a one hundred trillion dollar note like they didn't have all the way which couldn't even buy a bus ticket and that is the out money. go way still ahead right here on. news that may be considering a new program to help the mortgage market i spoke about it a little bit earlier but we're really going to get into. this one really be healthy and first closing numbers. to the county. all right so as i said earlier federal reserve officials are

alan greenspan. this guy, the five times chairman of the federal reserve, he's speaking this morning in washington and you can bet traders will be paying attention. . the topic the economic crisis and why the recovery has been to anemic. green span will also discuss the impact of political uncertainty both here and in europe on the u.s. market and the economy. >>> you've got the money. if you've got it you can check more of it into a 401k without getting hit with taxes. the irs is raising the maximum contribution that workers can make. it will rise by $500 to $17,000 next year. the increase is required by law to adjust for inflation. the most recent data shows only 9% of people with 401ks contribute the maximum amount. and the reason why, a lot of people don't have $17,000 just lying around. >> exactly. dr. greenspan again, is he delivering the speech here? washington? >> he is. yep, here in washington. >> wow, that's going to be very interesting. >>> bank fees, we know everybody hates them particula

daniel moynihan was a member of the greenspan commission that save social security when it was in crisis which i would say is a distinction today when it is not in crisis. when an did have those views. he thought social security was not in its form than a sustainable program but that was a minority view even on that commission and that included conservatives like bob dole and alan greenspan who was by no means a liberal. moynihan's view of social security was not the majority view and even if they would have been the majority view some of the things he pointed out have been rectified. they were rectified by the 1982-'83 reforms which put social security on much stronger -- >> have a question? >> the influence of the supreme court during the administration of fdr is interesting. one of the more interesting things today has been the supreme court decision this to characterize corporations with the same free speech rights as individuals and doing away with the reform in terms of contributions. it is going to have a dramatic effect. >> i agree. >> the influence will be significant. can you e

you're saying it was alan greenspan doing it. well, i'm no fan of greenspan's, but a financial system that depends on always having the perfect leadership at the central bank is a financial system that is doomed to failure. monetary policy is always less than optimal. what we had was a financial system that thanks to deregulation, thanks to financial developments that had bypassed the existing regulations was far more prone to abuse. those are the abuse that we have to have a reckoning about. >> it has to do with the political allocation of capital thanks to fannie mae and freddie mac and various government interventions on behalf of various kinds of not only lenders but borrowers. i want to just push back on another point. before you sort of make -- assert the premise that this is a populist movement that's taking place on wall street, i lived down there. i don't know if any of you have gone to zakadi park and chatted with some of these guys. this is not pop limp, this is many anarchism or something entire different. what you do

in fact a member of the commission in 1982, the greenspan commission that save social security when it truly was in crisis, which i would say is in distinction to today when it is not in crisis. moynihan actually was -- he did have those views that you talked about. he thought that social security was not in its form then a sustainable program, but that was a minority view, even on that commission, and that commission included a conservative like bob dole and greenspan who was by no means. i think his view that social security at the time, the majority view and even if they would have been the majority view, some of the things that he pointed out actually have been rectified, rectified but in 1982, 1983 reforms, which put social security on a much stronger fiscal standing. i think you have a question. >> the influence of the supreme court during the administration of fdr's. one of the more interesting things today has been the supreme court decision to characterize corporations with the same free-speech rights as individuals and doing away with some of the reform in terms of contributi

. >> that was the ratio that greenspan looked at, right? >> susan: absolutely. >> that's an important ratio. >> tom: quality com, smart phone chips, big growth in this industry, but the stock price doesn't necessarily exhibit that kind of growth as the market has. >> well, it hasn't recently and the earnings have been doing pretty well. so i'm giving you three here today, i've each en got a fourth for your website. we've got johnson and johnson, quality com, and pepsi. you know, here's a tech stock, the food and johnson and johnson for the medical. so at 14 times earnings not overly priced at all. 12% grower or better, and again a 1.6% dividend. this is a global company, and it's not going anywhere. it got great patents on thought air chips and parts. >> tom: how about disclosurees, do you own any positions? >> i own all of them, my clients own them, my family owns them, i own them. >> tom: unmichael mentioned one more pick, it on our website. you can e-mail us with any questions you may have for our experts. it's michael farr with street c

independent fed owned by the banks to make the correct policy for the elected government right but greenspan kind of blew that concept then and fed by every single time there was a political problem in washington he lowered interest rates which created the bubble which created the enormous banking fraud which created this massive depression now you mentioned so over a moment ago and we did that crash j.p. morgan by silver campaign it caught huge attention all over the world crisis over that time was twenty secs. rocketed up to fifty dollars an ounce there's been a pull back down to the thirty range still in a bull market still looking good but walk us through how you how that works you're taking physical silver off the market so how does that crash the banks well actually you're probably more adept at that argument than i am in you've made it many times and better than i can but i think the the key the key function to me is silver amongst many other commodities is actually traded as a commodity and the futures far exceed the actual physical product right so if we the people go out and and ph

the tea party candidate, the alan greenspan being a guy that could run the fed.ut if he wants to part with the tea party movement. hats off to cnn. we continue to be the only network that can provide a debate without a shaky camera. >> one quick question about perry. carol brought up something earlier in the program i thought was fascinating. perry seemed not very perry last night. >> yeah. where was the guy? the second half of the debate, the first few debates, the first half he was there. the second half he checked out. this one he waited to punch the library card until the second half of the debate. the interesting thing, a lot of talking heads saying perry lost the debate because he didn't shine. conservative activists, perry supporters saying last night wasn't as bad as the last debate. maybe he's turning it around. set the benchmark so low. really all he had to do show up and smile and the perry folks would be a little more at ease this morning. >> part of the 53% who pay taxes and don't like it, and also nice to see you this morning, sir. >> thank you. >>>