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]
Greenspan
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Bancroft
Burkle and Greenspan Meet With Dow Jones: Murdoch Meter Doesn’t Flinch
By Dealbreaker
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]
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]
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FOREX
Bloomberg: Pay No Attention To The Crazy Old Man Asking For Spare Change. It’s Just Alan Greenspan
By Bess Levin
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]
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