Ken and Alan Show
GUIDED BY hindsight, Mr Greenspan's critics complain that he started too late, and that his easy policy last year fuelled the boom in the bond markets which has been so painfully corrected this year. He was still nursing America's banks, as a lender of last resort must be expected to do. It does not seem to shock Americans, as it seems to shock us, when their banks re-learn the knack of making money — but they are used, as we are not, to the idea that weak banks go bust. Justifying this year's policy, Mr Greenspan takes his cue from the mar- kets. They can sometimes tell you more, he says, than the bare economic figures would. Compare and contrast Kenneth Clarke, who at the Mansion House attacked the fainthearts of the market for doubting the cheerful forecasts of their own economists. As it happens, the Midland Bank offers a test case. When the bond markets cracked, its economists called this a great opportuni- ty to buy. The Midland and its parent HSBC bet this way until their losses ran into nine figures. They have now stopped betting. Advantage, Greenspan.
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