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US Fed chief Greenspan warns of unrealistic views
Jackson Hole: USA: Alan Greenspan, the chairman of the Federal Reserve has warned that people have been unrealistic in believing that the economy has become permanently less risky.

In the first of two speeches at a Fed symposium about the "Greenspan legacy," the chairman warned that investors as well as ordinary consumers had become too complacent in assuming that high interest rates, high inflation and sluggish growth in productivity were all things of the past.

Greenspan took particular aim at the willingness of investors to pay ever-higher prices for stocks and bonds and at the torrid rise in housing prices.

Greenspan noted that the big increases in wealth of the past decade stemmed in large part from the rise in prices for everything from bonds to houses, but that such increases can evaporate if investors suddenly become more worried about risk.

"Such an increase in market value is too often viewed by market participants as structural and permanent," Greenspan said. But he warned that what people perceive as an abundance of new wealth "can readily disappear."

Greenspan was also alluding to a much broader pattern of economic behavior, an increased hunger among investors to look for higher profits wherever they might be and to pay higher prices for everything from the bonds of Latin American countries to shares in high-risk hedge funds.

But the Fed chief's comments nevertheless suggest that the central bank wants to preach a new gospel of caution that might dampen what Greenspan once called the "irrational exuberance" of investors.
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China, EU textile talks inconclusive
Beijing: China and the European Union (EU) have failed to reach an agreement at talks in Beijing aimed at solving the current textile impasse.

According to a Chinese ministry of commerce statement quoted in the China Daily, the Chinese side expressed great concern over their country's textile stockpile at EU customs, while the EU admitted the policy did not meet the interests of its domestic traders and consumers.

According to statistics published by EU Customs on Wednesday, eight of the ten categories of Chinese textiles have already reached their quota limit, set in June. Forty-eight million sweaters, 17 million pairs of trousers and hundreds of tonnes of other textile products are piling up at EU borders, unable to access the market, according to the report.

According to the Chinese side, when the quota-free era began in January, importers and exporters had not even considered the possibility of caps being introduced after just a few months.
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