Crash of '87
Jude Wanniski
November 17, 2000


From: "Angell, Wayne (Exchange)" <wangell@* * * * *.com>
To: "'Jude Wanniski'" <>
Subject: RE: Crash of '87
Date: Fri, 17 Nov 2000 16:08:07 -0500
From: Wayne

Bob did not interview me for this piece after Greenspan's appointment.  He did interview me in the Spring of 1987 for a book he was writing on the Fed under Paul Volcker's leadership.  Those interviews combined to 9 hrs.--much opportunity for me to get an insight into what drove Bob Woodward.

I have read some Post Excerpts and will buy the book.

I did obtain a copy of the October 26, 1987, issue of Fortune.  It seems to me that Greenspan was not suggesting that the dollar had to fall in order to correct the trade deficit.  As I read the piece it was more that Greenspan was interpolating the 3 % spread between dollar interest rates and yen interest rates and then suggesting that the spread amounted to a market
assumption that the dollar  was going to fall against the yen.  But, it is true that Greenspan was no bulwark against those in the Treasury, including Jim Baker, that wanted the dollar lower.  I agree with you that the 1987 stock market event was initiated by the division between what the Fed was doing, increasing rates, and what Treasury was saying.

 -----Original Message-----
From: Jude Wanniski []
Sent: Friday, November 17, 2000 10:17 AM
To: Wayne Angell
Subject: Crash of '87

I watched Bob Woodward last night on Charlie Rose and would have laughed out loud if it were not so painful to have him tell his audience, as he has apparently in his new book "Maestro," that Alan Greenspan saved western civilization in October 1987 by issuing a one-word statement that he would supply all the liquidity the market wanted as it Crashed around him.

Woodward's book should be discredited, I think, because it cements in place the idea that a wise Fed chairman can run the world. What I'd like to know from you is if you were interviewed by Woodward. He had interviewed me several times in the past abour earlier books he had written, but this time I never heard from. His method is to interview as many people as he thinks are important and have them tell him, on tape, what they think happened in 1987. Of course, he interviews people like White House chief of staff, who admits he knows zero about what is going on, that Greenspan's one-line statement saved the world. On Charlie Rose last night, then, when asked how he knows Greenspan saved the world, Woodward cites Howard Baker.

Here is a piece I wrote earlier in the week for my website, about how Greenspan actually caused the crash, with the help of Jim Baker at Treasury and his fight with the Bundesbank. Please let me know if you were interviewed by Woodward. I'm getting the book to see if he spent any time trying to figure out what caused the Crash to begin with, or if he assumes
a bubble.

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