Greg Ip
speaker
528 appearances
8 recordings
1 series
first heard Jan 2018
last heard Sep 2024
Greg Ip’s voice in public audio — every appearance, attributed to the second.
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Appearances
WSJ Your Money Briefing · Should Incoming Fed Chair Powell Prepare for a Bust? · 12 Jan 2018
podcast
We're speaking with The Wall Street Journal chief economics commentator Greg Ip, and you are listening to Your Money Matters from The Wall Street Journal.
Welcome back, everybody.
So, Greg, even though current chairwoman of the Fed Janet Yellen said there aren't any flashing red or orange lights, economic trouble can sneak up without a recognizable crisis as a warning.
That's right.
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I mean, generals always fight the last war and central bankers always look for the signs of the last crisis.
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So in some sense, they've put in lots of measures to prevent another housing collapse, but maybe that's not where the problem is going to come from.
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I mean, if we just look at the rise in equity values, the trillions of dollars in new wealth created in the last year or two, that's been a pretty powerful tailwind to the economy.
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If the stock market were to undergo like a 20% bear market,
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which is not at all an unusual thing, even though we haven't seen one since 2009.
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If that were to happen, that could knock a full percentage point off economic growth, according to economists at Goldman Sachs.
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Maybe there are problems lurking out there in the corporate debt markets that we're really not aware of because everything has been so great.
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You know, there's a famous saying that it's not until the tide goes out do you see who's been swimming naked.
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And that's true of financial systems as well, is that until the bubble bursts, you don't really know what kind of
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excesses have been taking place there.
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So I can think of a number of ways why, even though I wouldn't expect things to ever be as bad as 2008 by a long shot, you could still have a lot of pain.
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I mean, let's remember when the tech bubble burst in 2010, it did not cause a financial crisis, but it still caused a lot of pain.
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There were a lot of companies relying on the issuance of stock in
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There were a lot of people who felt wealthy and they were spending because they felt wealthy because their stocks were worth so much.
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And last but not least, in that episode, and again in 2007, 2008, the Fed had over five percentage points of interest rate ammunition to use when things turned south.
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Today, they've only got one and a half percentage points.
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Showing 501–520 of 528 · page 26 of 27
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