This May, the University of Texas Press will publish a book by Robert Auerbach, called “Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan’s Bank.” In it, Auerbach questions the legitimacy of Greenspan’s Ph.D. thesis from NYU, implying that the paper was “obtained in a few months with little more rigor than a matchbook-cover art degree,” and that were you or I ever privy to reading the thing, it would be plainly evident that Greenspan was blowing the half the degree-granting faculty. Luckily for Greenspan, that’ll probably never happen, because, according to Auerbach, New York University is in cahoots with the former fed chairman to keep Auerbach/other interested parties from every laying eyes on that puppy (Auerbach says NYU’s provost, David McLaughlin, claims that dissertations from the 1970s were not placed in the library, and therefore unavailable, which Auerbach doesn’t buy FOR A SECOND).

Obviously this whole thing is making Bernanke tweak his nipples in delight, and our sources in Washington tell us he’s taken to walking around town with his paper tucked under his arm, replying with feigned innocence when people ask what it is, “Oh just the musty old thesis. Needed to check something; still holds up pretty well. See: Benjy Bernanke, MIT Class of 79.” We’ll do an extended review of the book when it officially comes out, but from the unedited copy we were able to get our hands on today, here’s the other shit Greenspan doesn’t want you to know about that you can likely expect to read, barring any major rewrites.

Auerbach alleges that :

1. Greenspan hasn’t read any of Ayn Rand’s books.

2. All of his addresses to Congress involved typing a speech at a third-grade level then using Microsoft’s thesaurus to replace every single word with the most fancy-sounding substitute — even if he didn’t know what it meant.

3. It is a lie of the highest order that Greenspan conducts 80% of his business out of the tub; the author claims “evidentiary proof” that “all the magic happens on the can.”

4. His basement wall is littered with photos of, articles by and home addresses of “infidels I must exterminate,” including Robert Auerbach, Jim Grant, Bill Fleckenstein, and Alan Abelson.

5. BG has 20/20 vision and wears the glasses to “look smart.”

6. He never dated Barbara Walters. Actually briefly dated Geraldo Rivera (then Jerry Rivers) during his late-70s “experimental phase,” and Phyllis Diller for the better half of the 1980s.

7. He lies about his age. He is really only 42.

8. Greenspan inflated his resume credentials; actually spent most of the 1960s and early 1970s running “Easy Al’s Used Cars” in Dubuque, Iowa.

9. During undergrad his source of income was from peddling phony tips on penny stocks, then cleaning up shorting them, and working as a phone sex operator. The book goes into graphic detail, noting that Greenspan was known for his unique style, telling callers things like, “At this juncture you should feel your labia minora becoming engorged. (Since retiring, Greenspan has apparently fired the phone line back up, to much success. $3.99/minute, call 203-890-2000)

Dr. Greenspan’s Amazing Invisible Thesis [Barron’s]

I just saw (not so) “big al [Greenspan]” leaving the hotel on fifth ave (next to cipriani btwn 59th/60th). Not only does the guy have a Louis Vuitton luggage, he had an orange LV duffle. Seriously, what was he thinking?…I would have taken a picture if hadn’t been so nasty outside. The orange was similar to a “blood orange”, even moz would have been appalled.

An insane Alan Greenspan told an audience of investment bankers, private-equity companies, and Weekend at Bernie’s fans gathered in Chicago for the Midwest ACG Capital Connection conference that he, “didn’t know enough to comment on an agreement among Citigroup, Bank of America, and JP Morgan Chase to increase liquidity in the market for asset-backed commercial paper.” We’re assuming that when one litigious young banker asked, during the Q&A section of the program, “Then why did you say last week, and I quote: ‘[The $75 billion Master Liquidity Enhancement Conduit] could conceivably make [conditions affecting investor psychology] somewhat adverse because if you believe some form of artificial non-market force is propping up the market you don’t believe the market price has exhausted itself” and more or less flat out say that the super-fund will have dire repercussions,” Greenspan answered the question with the question, “Let me ask you this, litigious young banker probably from Goldman Sachs – that Bernanke fellow, he kind of sucks, no?” and then quickly changed the subject by warning, “there will be a crash in Canada, I just don’t know when.”

On another note, if anyone can supply the glasses necessary for a “Slutty Alan Greenspan” Halloween costume, it would be much appreciated. Otherwise, one of us is going to have to go as a “Slutty Maria Bartiromo.” Or, you know, just a “Maria Bartiromo.” (We kid the Bartiromo, of course.)

Earlier: The First Rule of Being Alan Greenspan Is That You Have To Piss All Over Anything That Doesn’t Have To Do With Alan Greenspan

Greenspan Says `State of Fear’ in Credit Markets [Bloomberg]

Not content with merely criticizing Ben Bernanke, and the Federal Reserve in general, Alan Greenspan has found a new punching bag in Citigroup, Bank of America, JP Morgan, and Wachovia’s $75 billion Master Liquidity Enhancement Conduit (MLEC), saying that it could have terrible consequences and risks doing more harm than good (and that “it’s name is just plain stupid, and, dare I say it, worse than the Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund”). Though the plan is an attempt to prevent SIVs from being forced to dump assets in a weak market because scared investors won’t buy their new commercial paper, Greenspan, who since retiring has been spotted taking classes on Freud at the Learning Annex, argues that the move “could conceivably make [conditions affecting investor psychology] somewhat adverse because if you believe some form of artificial non-market force is propping up the market you don’t believe the market price has exhausted itself. Events where we go from euphoria to fear virtually overnight are built into human nature and you cannot really defuse them until the speculative fever breaks. When it breaks, it’s very abrupt and you just have to wait it out.”

Greenspan also criticized the intervention because it will make “the vultures stay away,” and, in his (not saying early stages of dementia but something like that) estimation, “the vultures sometimes are very useful.” As an aside, AG noted: “There will be a crash in China, I just don’t know when.” I shit you not.

Greenspan delivers sharp warning on superfund [Emerging Markets]

First, we want to offer a sincere congratulations to Alan Greenspan, for proving that in spite of his retirement and status as an octogenarian, the value of his opinions haven’t yet been placed somewhere between those of a house plant and Jim Cramer (in descending order). In fact, some people—okay, traders—even take his words to mean something. On the heels of Greenspan’s optimistic call that the credit crisis is “about to be over,” investors rallied the Dow past its July peaks, to a high of 14,087.55, up 191.92 (1.4 percent). So that’s nice. Good for the economy and good for Greenspan.

So why, then, does the guy have to be sort of a prick toward his successor? It’s not enough that he insists on remaining in the spotlight instead of going to Florida to die like all good retirees do. Greenspan’s made it his “post-work, I need something to do all day besides putter around the house” hobby to undermine the Beard of Irrelevancy (that’s what AG calls him) and the Federal Reserve (and central banks in general), saying in Amsterdam that “The Fed, ECB, BOE, and BOJ are all losing their ability to influence longer-term rates,” and suggesting that Ben Bernanke be fitted for dentures and get an Rx for Cialis. It’s almost as though he wants to see them fail. But why?

a. So he can be called in at the 11th hour to save the day.

b. His thinly-veiled hatred of Bernanke masks a deep-seated bitterness over never having been able to grow facial hair.

c. He’s an asshole

d. He’s bored

e. He…knows what he’s talking about?

What Recession? [New York Post]
C. banks less able to move long term rates-Greenspan [Reuters]

In “fireside chat” to discuss his memoir, The Age of Turbulence: Adventures in a New World, Alan Greenspan shocked interviewer Daniel Yergin by using the words “I” and “yup.” Then he recounted entertaining (horribly indulgent, enabling) relatives at a young age by doing math problems in his head, and estimated a 42.35% risk of recession.

The 42.35% Chance: A Chat with Greenspan [CNBC]

Former Fed Chairman-cum-author/Deutsche Bank consultant Alan Greenspan said in interview with BBC Radio that he and other regulators were fully—blithely actually—aware of the risks imposed by the complex financial derivatives that helped to fuel the recent market turmoil that’s messed with your shit. So why wasn’t any action taken prior to last week? Because you knew the risks involved, and if you didn’t, you’re dumber than Greenspan had previously thought.

“I must admit that I do not have considerable concern about the net worth of [wealthy individuals investing in hedge funds] going from $40 million to $5 million, which in many cases is what has happened,” he said. In fact, he saw the whole thing as the perfect opportunity to teach you a lesson, not unlike the time he illustrated the dangers of binge drinking to a bunch of middle school students by standing idly by while they downed shot after shot of tequila, saying only to a concerned-looking aide, “this is the only way they’ll learn. Nothing like the memory of a good stomach-pumping to make ‘em think twice about that next drink.”

Oh, and there’s maybe going to be a recession. Maybe.

Greenspan: Recession chance less than 50-50 [CNN Money]

This week Greenspan was everywhere defending his decision to encourage millions of Americans to take out variable mortgages in 2004, even while he was about to embark on a huge interest rate raising campaign.

Even Barbara Walters poked fun at her old boyfriend, scoffing at Al’s real estate record on “The View” this week. Walters recounted how Greenspan convinced her not to buy a Fifth Avenue apartment in the mid-’70s because it was a “bad investment.

Listen To The Shillers, Not The TV Shills [New York Post]

It’s Monday night and don’t kid yourself, you don’t have any plans. The most action you’re going to get tonight is from the vibrations of the treadmill as you speed walk across the belt (yeah, it’s early in the week so you better get your fanny to Equinox for at least 30 minutes cause you know it’s the only time you’re going to work-out this week). So, after your hard core Monday evening workout, we suggest you put your feet up, grab a Heineken and tune into CNBC circa 9pm. To coincide with the debut of Dr. Alan Greenspan’s publication, The Age of Turbulence: Adventures in a New World – the delicious dish, Maria Bartiromo has interviewed Dr. Greenspan delving into his “life, career and impact of the most important central banker of modern times.” We say, DVR Monday night football, get out a fresh can of cheese balls and pay close attention. We can’t think of a better appetizer to tomorrow’s main course – the Fed announcement.

Greenspan: Power, Money & the American Dream [CNBC]

Although a NewsCorp deal will likely may be announced this week, Ron Burkle and Brad Greenspan, two renegade investors no one takes seriously had a meeting with the Dow Jones board yesterday. The pair, who did not present an offer and have few, if any commitments from other investors, want to “buy out only those members of the Bancroft family who wanted to sell,” the New York Times Reports.

The primary Dow Jones union recruited Burkle, who owns the private equity firm Yucaipa Companies, to partner with Greenspan and block Rupert Murdoch’s bid in what seems to be another effort to protect the journal’s editorial independence. The New York Observer details the lunch between Greenspan and a union leader in which the plans were discussed.

“I think it’s clear the family does not want to sell to Rupert Murdoch. If they did, they would have taken the $5 billion a long time ago. We would much rather have the family continue its stewardship of this company. I believe that working with Burkle and a number of other people, we have alternatives, if the family wants an alternative,” union leader Steve Yount tells the Observer.

But does this make any sense? Does the addition of Burkle make Greenspan’s half-baked bid less crazy or twice as crazy? We would side with the latter, but don’t take our word for it. Take the word of the former chief executive of Dow Jones, Peter Kann, who the Journal describes as “outspoken in his support for the independence of Dow Jones”

“If the family is going to sell I see no point in pursuing industrial conglomerates, Internet entrepreneurs, supermarket magnates and real-estate developers. None know anything at all about journalism. As to Mr. Murdoch, at least he loves newspapers, presumably would invest in the WSJ and Dow Jones, and would seem to have little incentive to tarnish a trophy he has coveted for so long,” Kahn says in today’s Journal story on the item.

Also, see Gary Weiss for what happens when amateur investors buy newspapers. A serious question for Dow Jones employees who may be invited to join some sort of leveraged Employee Stock Ownership Plan rival buyout bid is whether they want to spend part of their paycheck buying the company from the bondholders for the next decade or so. Because that’s the best-case proposal from a Burkle-Greenspan partnership.

Shares of Dow Jones traded slightly lower today, bringing our technical arbitrage measurement down to 90%. But we’re exercising our own editorial independence here and refusing to move the meter. It remains unchanged at 95%.

Burkle and Greenspan Gather Journal Kiddies for ESOP Fable [New York Observer]
Dow Jones Hears Alternative Proposals [Wall Street Journal]
2 Investors Discuss Partial Purchase With Dow Jones Board [New York Times]

There’s been a lot of speculation around these parts about the wisdom (or not-wisdom) of Alan Greenspan. Some people think he’s a guy we ought to listen to. Others have no problem displacing his words with the lyrics to “Pina Coladas” and the sound of crinkling newspaper when he speaks. Greenspan is apparently in the former camp and has vowed to tone down his speeches, re: markets, etc. Taking precautions to prevent Old Greenspan from getting the better of New Greenspan while speaking at BookExpo America to promote his upcoming book, “The Age of Turbulence,” organizers moved his talk from the middle of the day to 5:15 p.m. For those of you still not sure how you feel about the Maestro, perhaps this tidbit that he revealed on Friday will tip the scales (though in which direction we’re not sure): most of his book was written in the tub.

Rub-a-Dub-Dub, Maestro’s Speech Scrub [NYP]

A favored reader e-mails: “US markets (supposedly) reacted negatively to comments made by the ESTEEMED former Fed Chair Alan Greenspan, this time regarding his warning of a dramatic fall for Chinese markets…check this chart and tell me again why we should pay that close attention??”

And what a magical, magical morning it would be. Starting today and lasting until April 6, you can bid on breakfast with former Federal Reserve chairman Alan Greenspan0, at http://www.charitybuzz.com/. How much you’re willing to bid on this coveted prize probably depends on whether or not you think his forecasting ability is wildly exaggerated but even Greenspan’s most ardent critics cannot deny the fact that the man makes a fantastic Western omelette, not to mention the fluffiest waffles you’ll ever taste in your life.

Earlier: Bloomberg: Pay No Attention To The Crazy Old Man Asking For Spare Change. It’s Just Alan Greenspan

How Much Would You Pay To Break Bread With Greenspan? [FINalternatives]

If there’s one thing you can say about Bloomberg’s Caroline Baum, it’s that she’s not afraid to take a hockey stick to the knees of an 81 year-old man. Yesterday it was crotchety old Carl Icahn, tomorrow is anyone’s guess. We’re going with an outpatient at Sloan-Kettering. Today’s recipient of Caro’s best (and mostly successful) attempt at a Tonya Harding is, as the head would imply, Alan Greenspan. Basically, her point is that he’s your crazy old grandfather/local homeless man who should’ve been put in a home/half-way house years ago, who won’t stop talking to himself and gesturing wildly, who you should just completely ignore. Let him talk ‘til he’s blue in the face, you don’t have time for his inanity and self-involved bull shit. He’s basically a child but guess what? You’ve already got a baby and unlike Greenspan, he’s rarely wets the bed anymore, if ever.

All the criticism of Greenspan issuing forecasts that conflict with the Fed’s rosier outlook misses one key point. He can talk all he wants. You don’t have to listen.

After 18 years as a civil servant, where his maximum salary was $180,100 a year, the man is entitled to earn a living. That his chosen metier is the same as it was before he became Fed chairman — he was president of Townsend-Greenspan & Co., a consulting firm — isn’t surprising. He was not about to open Greenspan Plumbing & Heating Supply Co. at age 81. The problem is that you seem to care about what he says.

It’s surprising that folks care so much about Greenspan’s musings considering their less-than-pithy nature. Last week he told Reuters that the popular “carry trade,” wherein traders borrow Japanese yen at a low rate of interest to finance, or carry, higher-yielding assets, would turn “at some point.” His comment that shook the world two weeks ago was that a recession was possible by the end of the year. (Anything is possible.) What’s shocking is that anyone would pay for these insights.

Look, Greenspan can talk all he wants. He can ramble on about oil futures prices and the federal budget deficit and the burden retiring baby boomers will place on the U.S. economy in the next decade. You don’t have to listen. The press doesn’t have to tail him. Let him be.

Also? When he was still at the Fed? People totally talked about him behind his back.

Not that anyone expected him to go quietly into the night. Greenspan’s tenure at the Fed was devoted to the cult of his own personality. He nurtured his credibility at the expense of the institution’s. Even his biggest supporters inside the Fed criticize him (off the record, of course) for that.

But that’s probably because he was a total slut, and definitely had it coming. At least that’s what Heather told Stacey who told Leah who told Lara who told me who made me swear on my limited edition Brandon Walsh doll that I wouldn’t say anything. That’s right ladies—I took the oath of sideburns.

Greenspan Can Talk More. You Can Listen Less [Bloomberg]

Leave it to Alan “It’s not easy being” Greenspan to ruin our newly minted favorite holiday—Biggest LBO Ever Day. We thought we’d reached a point where we could expect, if not full on participation in the breaking of the coal burning energy plant-shaped piñata that Carney picked up on the way to work this morning, at least some level of cooperation on this joyous occasion. But apparently we thought wrong. Greenspan, like always, had to go and ruin it, like he ruined Schwarzman’s birthday (yeah, like we could really be expected to show up with a huge salsa stain down the front of our dress), like he ruined Sam Zell’s Purim Party ‘04, like he ruins EVERYTHING!

“When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign,” Greenspan said via satellite link to a business conference in Hong Kong. “For example in the U.S., profit margins … have begun to stabilize, which is an early sign we are in the later stages of a cycle.”

Greenspan said that while it would be “very precarious” to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

Greenspan also warned that the U.S. budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years, remains a concern.

Now, if you’ll excuse us, we’re going to attempt to salve our wounds with this. It probably won’t help, but, as you can likely glean, we’re pretty much desperate at this point in time.

Greenspan Warns of Likely U.S. Recession [AP via Yahoo! Finance]

Yes. That’s how long it’s been since Alan Greenspan sent the markets tumbling with his mention of “irrational exuberance” (a tip of our hats to Eddy Elfenbein for the reminder).

Here are the words that sent panic waves through the hearts of many:

Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.

That’s it. We didn’tremember that it was phrased so mildly, and even put in the form of a question. At the time it didn’t seem mild. In fact, in 1996 it came as something of a shock. Of course, it was a temporary shock and we remained exuberant for a least a few years more, in part because despite the talk of irrationality the Fed didn’t do very much to restore rationality.

The Challenge of Central Banking in a Democratic Society [Federal Reserve via Crossing Wall Street]

“Greenspan: Pricey oil no big deal, yet”—CNN Money.

“Greenspan: Energy Costs May Stunt Economy”—ABC News.

Now that’s what we’re talking about! Mysterious mutterings leading to completely opposite interpretations. It’s like having the Delphic Oracle testify in front of Congress. So. Best.

Our favorite Greenspan story* has him writing his yearly predictions about the world economy in a guest book at a friend’s house. He would then fold the page over and leave instructions for it not to be revealed until his visit the following year, at which point he would unfold the page and test his accuracy. He was, of course, always exactly right. One year the owner of the house got a little too curious and decided to overturn the page early. He discovered a blank page. When confronted, Greenspan admitted he had been folding over a blank page and filling it in post-hoc on his next visit.

*We have no idea where we heard this, much less whether it is true.

Today we got reminder of the time Before Bernanke. A time when we had a Fed chairman who didn’t so much as say things as riddle them.

In Alan Greenspan’s first appearance before Congress since stepping down as the head of the Fed, Greenspan mixed the very obvious (oil is expensive) with the very conventional (if oil gets too pricey it hurts growth) with the mysterious. How much would it hurt growth if oil continues to climb?

“It’s very difficult to tell how much because a large part is psychological,” Greenspan said.

Can we call it “irrational contractionary impulses?” Remember how much fun those sayings were?

Mmmm. The old mystery cult of the Fed. We cannot help but miss the old guy.