There is an article today on CNBC.com about an interview with Greenspan on CNBC’s “Squawk Box”. Embedded in the article is a video clip of the interview, but it is very short. It includes only this sound bite of Greenspan talking about the rally in stocks:
The stock market is significantly undervalued by historical calculation, said Alan Greenspan, former chairman of the Federal Reserve. “The reason why the stock market has not been significantly higher is there are other factors compressing it lower. But irrational exuberance is the last term I would use to characterize what is going on at the moment.
I suppose once one learns Fed-speak, one never forgets it. It’s interesting that Greenspan doesn’t elaborate on what those “other factors compressing it lower” are. Or, if he did, it was cut off the clip. Could he be a closet Market Monetarist? Enquiring minds want to know!
If you happened to see the interview on Squawk Box, I hope you will be so kind to let me know if Greenspan went into more detail.
Petar Sisko has a post that goes into much more detail about this interview.