As one of the financial community's most prominent retirees, Alan Greenspan can't seem to let the spotlight go. Dear old Uncle Alan is behaving a lot like a retired President: no real authority or anyone to answer to anymore…he just says what's on his mind. People listen and give him respect because of who he used to be. (Also, it might be because he's looking more like Yoda by the day.) But for all his wisdom (we have profound respect for the man and his career), is he really in a position to make pronouncements about the economy and the markets anymore? It's a question worth thinking about, as the media is quick to jump on any sound-byte he utters these days.
Under the Maestro's bespectacled rule, a very large machine of analysis and rigorous data crunching was built at the Fed. Numerous regional Fed offices, dozens of analysts, and many others were part of the system that produced the insights, not just Greenspan himself. True, the Fed Chairman is ultimately the one steering the ship, but a good captain is only measured by the worth of his crew.
Today, Greenspan's opinion is simply the opinion of one man—without the backing of the Fed's vast infrastructure and its vast access data. Still, Greenspan's got a mighty big incentive to talk…to the tune of $100 grand per outing. Greenspan is among the highest paid public speakers in the world, behind Bill Clinton at +$250 thousand per showing and Jack Welch at about $150 thousand.
Greenspan Talks, People Pay
By Staff, CNN Money
Win a Date With Alan Greenspan
By Staff, CNN Money
This reminds us of the crazies who bid tens of thousands to have lunch with Warren Buffet. Why? No one, to our knowledge, has ever gleaned some kind of secret insight or sage wisdom that's turned them into billionaires due to the encounter. It's more about celebrity worship than anything else; like having Richard Gere tell you about Buddhism.
Jimmy Carter yaps away on Larry King, Bill Clinton points fingers in the face of Fox News anchors, and Greenspan still makes headlines by talking about the economy. The truth is none can really affect things very much anymore.
Greenspan's Subprime Comment Fizzles as Lenders Climb
By Michael Patterson, Bloomberg
The Fed is meeting today and tomorrow. We're far more interested in Bernanke's and the rest of the Fed governor's comments than we are in octogenarian Greenspan's off the cuff remarks. Not only does the current Fed have the power to take action, but it's also the group with the most up to date, accurate data. Their conclusions are the stuff that can influence markets.