Poor Mr. Greenspan: can\u2019t open his mouth without giving investors the heebie-jeebies!
\nHe promised he would be quiet, just like his predecessor Mr. Volcker was about monetary policy when he himself took over. Even when he only whispers, people pay a lot, a lot of attention, and go into a frenzy of wanting to sell this or buy that. Hear him protest: “What I do talk about are the global forces that are functioning, how the world is running and how the economy is developing, in a manner that I used to do when I was an economic consultant. The only difference is back then I’d discuss what the Fed was going to do as a consequence of all this. Now, I just don’t do that.”
\nOn September 21st, 2006 Mr. Greenspan said that \u201cit is not yet possible to say whether \u2018mortgage equity withdrawal\u2019 is yet affecting consumption\u201d and these simple words sent bond yields into a tailspin.
\nOn February 26th, 2007 Mr. Greenspan said \u201cthe probabilities of forecasting a recession are probably more in the area of a third than they are more than a half\u201d and investors rushed into a stock sell-off that sank the DJIA by 3.3%.
\nSo no wonder that when he publishes a research paper (*), still under the auspices of the Fed (a very unusual feat for a former Fed Chairman, as commentators noted), he dutifully abstains from deriving any conclusions, being content with downloading the raw facts onto the innocent bystanders as if saying \u201cHey, notice: I\u2019m not stating anything!\u201d
\nMy guess is that he wouldn\u2019t mind however that someone else says something about what he\u2019s seen; why would he otherwise provide a neat Excel spreadsheet with all the numbers nicely aligned, invitingly asking to be interpreted?
\nWho would like to be the mouthpiece of the by now very, very quiet Mr. Greenspan?
\nWatch this space\u2026<\/p>\n