Home' Trinidad and Tobago Guardian : November 28th 2013 Contents A31
Thursday, November 28, 2013 www.guardian.co.tt Guardian
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Former Federal Reserve chairman
Alan Greenspan said the near record
US stock market isn t in a bubble, even
as the Dow Jones Industrial Average
breached 16,000 and the Standard
and Poor s 500 surpassed 1,800.
"This does not have the character-
istics, as far as I m concerned, of a
stock market bubble," Greenspan said
in an interview on Bloomberg Televi-
sion s Political Capital with Al Hunt,
airing this weekend. "It could come
out that way but I don t see it at this
The S&P 500 has rallied about 27
per cent this year, heading for the
biggest annual gain since 1998, as the
Fed has pressed on with its stimulus
The S&P 500 climbed 0.2 per cent
to 1,803.10 at 1.04 pm in New York,
while the Dow Jones Industrial Average
rose 0.1 per cent to 16,066.12.
"The stock price generally goes up
about seven per cent a year for the long
term," Greenspan said. "It didn t go
anywhere since October 2007 and the
result of that is we re just now breaching
that. We have had no growth in stock
prices for years."
The S&P 500 reached 1,565.15 on
October 9, 2007, and then dropped 57
per cent as the economy went through
the longest and deepest recession since
the Great Depression. The index didn t
surpass its October 2007 peak until
March of this year.
Greenspan also offered praise for
Janet Yellen, the nominee to be the
next Fed chairman. She was approved
by the Senate Banking Committee with
a vote of 14-8 on November 21 and
now heads to the full Senate.
Yellen was a governor at the Fed from
1994 to 1997 under Greenspan and
became president of the San Francisco
Fed during the final years of Greenspan s
tenure, which ended in January 2006.
Greenspan, 87, said he has "praised her
because she s very good."
He said her greatest challenge will
be managing the central bank s balance
sheet, which has grown to US$3.91 tril-
lion under the Fed s bond-buying pro-
grammes designed to lower unemploy-
"Eventually, we re going to have to
stop expanding and start bringing it
in," Greenspan said. "That process is
going to move interest rates higher, by
an indeterminate amount, and that is
going to create major problems for the
Federal Reserve as it always has polit-
The price of Bitcoin surpassed
US$1,000 on the Mt Gox online
exchange, fueled by speculators
snapping up the virtual currency as
it gains wider acceptance.
Bitcoins, which exist as software
and aren t regulated by any country
or banking authority, surged to a
record $1,073 today, up more than
80-fold from a year earlier. The cur-
rency has rallied on growing interest
from investors in China and the US,
while merchants are starting to accept
Bitcoins for everything from Gummi
bears to tuition fees.
The virtual currency gained cred-
ibility this month after law enforce-
ment and securities agencies said in
US Senate hearings that Bitcoin could
be a legitimate means of exchange.
The rally had gathered steam last
month after regulators shut down the
Silk Road Hidden Web site, where
people could obtain guns, drugs and
other illicit goods using Bitcoins, gen-
erating optimism that the digital
money would become more widely
used for legal purposes.
"Milestones do tend to provide
some validation, even though they are
entirely arbitrary," Nicholas Colas,
chief market strategist at ConvergEx
Group, wrote in an e-mail. "US$1,000
for a Bitcoin would draw attention
and certainly gives people positive on
the currency another reason to laugh
at the naysayers."
Bitcoins were trading at US$1,003
apiece today on Mt Gox, one of the
exchanges where the digital money
can be traded for other currencies.
On Bitstamp, the most active dollar-
based marketplace among online
exchanges, they were at US$949.90.
Bitcoins were trading at US$12 to
US$13 a year earlier, and have quin-
tupled this month.
Introduced in 2008 by a program-
mer or group of programmers going
under the name of Satoshi Nakamoto,
Bitcoins exist as software, which con-
tain the rules governing their supply.
New Bitcoins can only be created by
solving complex problems embedded
in the currency, keeping total growth
limited. There are more than 12 million
Bitcoins in circulation, according to
Bitcoincharts, a Web site that tracks
activity across various exchanges.
As US stock market tops 16,000...
It's no bubble
Bitcoin virtual money
at record US$1,000
In this November 21 photo, visitors tour the Volkswagen booth during Guangzhou 2013 Auto Show in
China's southern city of Guangzhou. As car enthusiasts converge on the Guangzhou auto show, few have
anything but a shiny new set of wheels in mind. But explosive growth that transformed China into the
world's largest auto market is also giving life to a new industry here: used cars. AP PHOTO
GUANGZHOU AUTO SHOW
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