Parsing Alan Greenspan

Mar 02 2001

The chairman had little new to say to the House Financial Services Committee on Wednesday, but that didn't stop pundits from slicing and dicing his words. Though stock scribes seemed more concerned with what Federal Reserve Chairman Alan Greenspan didn't say - the hoped-for rate-cut announcement - they couldn't scrutinize Greenspan's words enough.

Pundits who searched for clues by comparing the chairman's Wednesday chat to the one he gave on Feb. 13 came up empty-handed. The only real difference between the two speeches? About 150 words in length, outlets noted. Veteran wordsmith Christoper Byron noted the chairman's 'tude was akin to one he had seen many years before. "You know what it boils down to?" Byron asked on his MSNBC Webcast. "It's Greenspan saying to Wall Street, 'Drop dead,'" he wagged, riffing on the famous 1970s New York Daily News headline .

Bear Stearns economist Wayne Angell also had some choice words about Greenspan's appearance, calling it "horrible testimony" for dashing the notion of an intrameeting rate cut. But as SmartMoney.com pointed out, "horrible" might be a better word to use in describing the predictions of Angell, the former Fed governor who earlier in the week forecast an 80 percent chance for a surprise half-point rate reduction.

Taking the analysis a step further, Yahoo FinanceVision moved beyond words and delved into the alphabet. What letter shape will the economy's recovery take, asked the broadband service, which ran three interviews dissecting Greenspan's appearance and aired the chairman's testimony. Will it be a shallow V? A deep V? Maybe a U? To this, Mohamed El-Erion, managing director for PIMCO, somehow managed to muster a solemn explanation: "There's simply too much going on in this economy to think we can get away with a little V. I think we're looking at the U, or even a W. The good thing is we're not looking at an L."

Get a grip, advised Mark Urban of Stock Traders Press in a FinanceVision interview. The Fed's main job is governing the economy, not resurrecting the market when it gets weak. Someone give that man a column.