And you counted the Maestro out. You called him over. You said he was through. Blamed the bubble on him. Cursed under your breath when he appeared on CNBC. You got your Greenspan tattoo lasered off. (Bet you didn’t know they hurt worse coming off than going on, right? Bet you wished you picked a less sensitive spot.) But he’s been there. Waiting. In the shadows. Biding his time. Lurking in the dark until the right moment. And, like predator from cover, WHAM! He’s back! Like that he’s moving markets again. Housing, she will recover. The thickness of the briefcase is being measured. Fedwatching is cool again.
U.S. stocks fluctuated as former Federal Reserve Chairman Alan Greenspan said housing may be on the verge of recover, helping the market recover from an early slide spurred by concern share sales will dilute earnings.
Financial shares in the Standard & Poor’s 500 Index reversed most of a 4.7 percent decline after Greenspan told a conference that companies are able to raise more capital than they expected. Pfizer Inc. led gains in the Dow Jones Industrial Average after Credit Suisse Group AG said the company may boost its dividend after taking over Wyeth. Exxon Mobil Corp. led energy shares higher as oil climbed to a six-month high.
U.S. Stocks Fluctuate as Greenspan Says Housing May Recover [Bloomberg]
Now Greenspan tells us that temporarily nationalizing broke US banks might be OK. If that doesn’t stop you in your tracks, it should. The man often called the high priest of laissez-faire capitalism is saying that he can imagine briefly taking some of the most troubled US banks into state ownership because that is better than the alternative of letting the market sort it out. That is vertigo-inducing indeed, like Lenin doing an about-face on the whole capitalism thing. It is, quite rightly, getting a lot of attention. After all, if Greenspan thinks there are problems with laissez-faire capitalism, and with market-based solutions to banking problems, what is he likely to say next? That marginal revenue doesn’t equal marginal cost for profit maximization? The economic mind boggles at the idea.
Greenspan’s Hidden Agenda [The Daily Beast]
As you may know, the Maestro spoke at the Economic Club of New York yesterday, predicting that the present recession would “surely be the longest and deepest” since the one that crafted The Greatest Generation. (I know, I know, they’ve been insufferable ever since with their long walks to school up hill both ways through gray, dust bowl snow drifts. Now at least we have something to reply with. I mean seriously, you try going on without a flat screen TV after the BMW has been repossessed).
Answering a question after his speech on whether he would have done anything differently during his tenure as Federal Reserve chairman to try and prevent the housing bubble, Greenspan said, “I think it would be desirable to find a way to suppress asset bubbles. But I am skeptical that it can be done.”
But the spanner of the green didn’t stop there. He also told the Financial Times that bank nationalization may be inevitable. Oh, the humanity!
“It may be necessary to temporarily nationalise some banks in order to facilitate a swift and orderly restructuring,” he said. “I understand that once in a hundred years this is what you do.”
Recession will be worst since 1930s: Greenspan [Reuters]
Greenspan backs bank nationalisation [The Financial Times]
Some senator to the Beard of Reasoning: “You are refreshingly different from your predecessor.”
Related: Bernanke’s Big Moment
*A word of caution to those answering “Hell fuck no!”– please realize that this would necessitate actually get out of the tub, which we all know violates The Maestro’s fundamental beliefs, and would interrupt his flow.
Here’s a pretty hideous injustice, the broader economic implications of which are yet unknown, though they most certainly will be dire: Barbara Walters, whose autobiography Audition details, among other things, her sometimes simultaneous doing of Alan Greenspan and Ace Greenberg, has left out any mention of the former Fed chair and the former Bear chair in the book’s audio version. That’s right, the (best!) chapter, entitled “Special Men in My Life,” is skipped over completely. According to BaWa’s publisher, Random House, the omission is due to time constraints, though that strikes as us a bold-faced lie. While one gets the sense that Greenberg is staving off the tears by keeping busy with his new job at JPMorgan, magic tricks and dog shows, Greenspan, whose retirement gig consists of feeding his own ego [8:00 am scan the papers for mentions, 8:45 am Google self, including nicknames, 9:30 am preserve legacy by making sure no one listens to Bernanke**], is clearly not taking the slap in the face in stride. Will he invoke the Law of Return and bring it back to Walters three-fold (“You leave me out of the audio component? I release the sex tape in high-def”)? We’ll just have to wait and see.
Earlier: Barbara Walters Has Done 80 Percent Of Wall Street’s Living Dinosaurs
Barbara Walters’ Memoir: The No-Sex Edition [Time]
**all performed from bathtub
Barbara Walters’ book came out this week and it’s not just for those of you interested in a behind the scenes look at the catty infighting over at The View, though rest assured, Julian Robertson, there is plenty of that (as Babs tells it, “Star Jones was so obese she could barely walk onto the…set”). Apparently while Walters was dating Alan Greenspan, she was also seeing former Bear chairman Alan “Ace” Greenberg. (Ironic enough for you? Well try this one for size– though it’s not included in the autobiography, we hear the lady of the night additionally had a standing appointment with Jimmy Cayne ever week, which ultimately resulted in the birth of Ben Bernanke.) Before you go writing BW off as a harlot, keep in mind that the men served two distinct purposes– Greenberg bought her a show dog, and Greenspan doled out terrible investment advice.* It wasn’t all fun and games, however. Babs notes that lots o’ confusion would ensue when her maid would take messages and report that “Alan called.” Since she refused to refer Greenberg by his nickname– like Cayne, she thought the handle “Ace [in the hole]” was stupid and, in her words, “hypocritical, considering the number of times I had to shout, ‘No, Alan, no! You’re not even close!’”)– Walters and the cleaning woman came to differentiate the two as “loud Alan” (Greenberg) and “soft Alan” (Greenspan). Though he rarely identified himself, Walters says it was readily apparent when Cayne was calling, because “you could hear the the announcer’s voice over the loudspeaker at the tracks in the background.”
Barbara Walters On Greenspan [National Economist]
*Such as telling her not to buy a 4-bedroom co-op on Fifth for $250,000 in 1977.
As part of his Defending the ‘Span Tour ’08, Alan Greenspan appeared live via satellite today on CNBC, in a rare “not nude in the tub” post-retirement interview. We had the thing on mute, but this is how we imagine it played out:
Al: Maria, is that a new perfume, or is it just my musky pheromones raging?
Al: 2 million homes foreclosed? Fuck em.’
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