Chairman Alan Greenspan

ASK UNIVERSITY of Maryland history professor David B. Sicilia to explain the 108-point drop in the Dow Jones industrial average Aug. 27 and he'll likely ascribe it to the "Greenspan Effect."It's an apt label, demonstrating the increasing influence economists, professional investors and workaday consumers believe Federal Reserve Chairman Alan Greenspan has on the financial markets -- not just in the United States, but abroad, too."The Federal Reserve should not have the effect on the securities markets that it does, given what we call its `levers of power,' " says Sicilia, whose specialty is business and economic history.

WASHINGTON -- Federal Reserve Board Chairman Alan Greenspan said yesterday that the recent wave of industrial and financial-services mergers isn't likely to decrease competition. Still, mergers could create corporate bureaucracies so large that shareholders' returns are hurt, he said.Bank mergers "have led to a substantial rise in national concentration measures [but] they have little or no evident impact on average concentration measured at the more relevant local market level."Greenspan and top Clinton administration antitrust officials gave at times contrasting views on the merger wave at a hearing before the Senate Judiciary Committee.

WASHINGTON -- Federal Reserve Chairman Alan Greenspan suggested yesterday that the central bank was inclined to leave interest rates steady for the time being, but he issued a gentle warning that the nearly perfect combination of low unemployment and nonexistent inflation was too good to last forever.Greenspan's generally upbeat assessment of the economy, although laden with caveats, dispersed lingering anxieties among investors that the Federal Reserve would raise rates next month to head off any possibility of inflation infecting an expansion that has lasted more than six years.

CORAL GABLES, Fla. -- Federal Reserve Chairman Alan Greenspan yesterday applauded efforts in Congress to reduce U.S. government regulation of derivatives and financial futures markets.The central bank chairman offered what may be crucial backing for futures markets in Chicago and New York that are seeking legislation they say will help them recapture business lost to less-regulated over-the-counter markets and overseas exchanges.Greenspan spoke favorably of legislation introduced by Sen. Richard G. Lugar, the Indiana Republican who chairs the Senate Agriculture Committee, which would substantially deregulate U.S. futures and options trading.

WASHINGTON -- Never eager to pull the levers of monetary power, Federal Reserve Chairman Alan Greenspan likes to rely on a vigilante bond market and his own roundabout rhetoric to do the dirty work of slowing the economy and guarding against inflation.This week he got a new ally: stocks.The Dow Jones industrial average's 554-point dive on Monday "will tend to damp" the economy, Greenspan told Congress yesterday, "a development that should help to prolong our 6 1/2 -year business expansion."

FEDERAL RESERVE chairman Alan Greenspan's reputation as a skilled manager of monetary policy is such that Wall Street would have been disappointed had he not raised short-term interest rates by a modest quarter-percent yesterday.He had prepped the markets for such a pre-emptive strike against future inflation beginning with his December admonition against "irrational exuberance" on the part of investors and his warning that soaring share prices could be a factor in overheating the economy.

WASHINGTON -- Southeast Asian governments are primarily to blame for the recent currency troubles in that region, and any attempt by these nations to place controls on the cross-border flow of investment will have "adverse, unintended consequences," Federal Reserve Chairman Alan Greenspan said yesterday.Thailand was forced to devalue its currency, the baht, after it came under speculative attack in early July.The baht has lost more than half its value since its June peak against the U.S. dollar, and the contagion spread to Indonesia, Malaysia and the Philippines.

WASHINGTON -- The U.S. economy remains strong with few signs of immediate inflationary pressures even as an era of low wage gains may be ending, Federal Reserve Chairman Alan Greenspan said yesterday."

FEDERAL RESERVE Chairman Alan Greenspan rattled stock markets around the world when at a black-tie dinner in Washington on Dec. 5, he asked whether an "irrational exuberance" has sent stock and bond prices beyond reasonable levels.Even though they've been jittery, U.S. stock markets have held up in the aftermath of the Greenspan speech, and remain at dizzying levels. What was Greenspan trying to do through his comments? Was he trying to cool down the markets? Did the strategy work?Patrick C. RyanPresident, Ryan, Lee & Co., McLean, Va.He was sending a strong message about speculation.

AS WE WERE SAYING last March 5, Bob Dole "has a big problem thanks to his Republican friend at the Federal Reserve." Almost since President Clinton's inauguration day, he and Fed chairman Alan Greenspan have formed what we described in that March editorial as a "bizarre, unexpected partnership" that has resulted in a "payoff" for both officials. Mr. Clinton refrained from criticizing the austere monetary policies of the Fed and Mr. Greenspan, in turn, did his bit to keep the economy upbeat and healthy.

Can you blame Wall Street for being confused? Each mortgage security polluting our economy often holds hundreds of loans from dozens of states. Loans got bundled into layers according to default rates and repayment schedules, each batch dependent on what happened in the others. In case that wasn't squirrelly enough, Wall Street bought and sold insurance contracts whose values were ultimately tied to different parts of the unfathomable mortgage pool. "I'd like to know what those damn things are worth," Federal Reserve Chairman Ben S. Bernanke said a year ago this week.

WASHINGTON -- Federal Reserve Chairman Alan Greenspan used personal intuition and wide flexibility to set U.S. interest rates over the past 18 years. And Ben Bernanke, the man chosen to replace him, vowed at his confirmation hearings yesterday to continue Greenspan's policies if he takes over as expected in January. Economists said the differences between the two men will become apparent and will make monetary policy more mechanical than it has been under the 79-year-old Greenspan, who achieved star status as a leading U.S. and world economic figure.

Federal Reserve Chairman Alan Greenspan said the combined $1.47 trillion portfolios of Fannie Mae and Freddie Mac should be reduced and that moving too slowly to do so may disrupt the U.S. financial system. "Excessive caution in reducing their portfolios could prove to be destabilizing to our financial system as a whole and in the end could seriously diminish the availability of home mortgage funds," Greenspan wrote in a Sept. 2 letter to Sen. Robert F. Bennett, a Utah Republican, released last week.

LONDON - Federal Reserve Chairman Alan Greenspan said yesterday that America's record trade gap might be poised to stabilize and even fall because of market pressures and belt-tightening by the Bush administration. Greenspan was speaking at a gathering here coinciding with a scheduled meeting of the Group of 7 finance ministers and central bank governors who represent the world's leading industrialized nations. His remarks inspired a strengthening of the dollar. The G-7 talks, which end today, are likely to devote much attention to the U.S. trade deficits, the weakness of the dollar and the linkage of China's currency to the dollar, which has propelled the trade deficit by fueling a rapid expansion in Chinese exports.

Federal Reserve Chairman Alan Greenspan told members of the Senate banking committee yesterday that "inflation is not likely to be a serious concern" but that policy-makers are watching the effect of rising energy prices on the world and U.S. economies closely. Bond prices rose after Greenspan's remarks about inflation, continuing a rally that had begun earlier in the day after the release of May consumer price data that were not as bad as many had feared before the report's release. Greenspan spoke at a hearing on his confirmation for a fifth term as chairman of the Federal Reserve Board.

WASHINGTON - Federal Reserve Chairman Alan Greenspan roiled financial markets yesterday by declaring that the threat of deflation is "no longer an issue" and that the economy seems to be strengthening on many fronts. Greenspan's brief but buoyant comments about the economy, during testimony at a Senate hearing, sent shivers through the stock and bond markets, as investors interpreted his words as additional evidence that the Federal Reserve will raise interest rates before the end of the year.

Federal Reserve Chairman Alan Greenspan warned Congress and the Bush administration yesterday that Social Security benefits should be cut to avert serious economic problems from a ballooning budget deficit. "The dimension of the challenge is enormous," Greenspan said on Capitol Hill to members of the House Committee on the Budget. "The resolution of this situation will require difficult choices, and ... the future performance of the economy will depend on those choices." Greenspan indicated that he is in favor of making the Bush administration's sweeping tax cuts permanent despite the rising deficits because raising taxes could "pose significant risks to economic growth and the revenue base."

Federal Reserve Chairman Alan Greenspan offered yesterday his most optimistic outlook for the economy since he took over leadership of the central bank in 1986. And he gave no indication that the Fed is inclined to begin raising short-term interest rates soon. Bond prices moved sharply higher and stocks rose as well after Greenspan made his appearance on Capitol Hill. Greenspan, in his semiannual report to Congress on monetary policy, said "the prospects are good" for a "sustained expansion" of the economy.

JACKSON HOLE, Wyo. - Federal Reserve Chairman Alan Greenspan made it clear yesterday that human judgment should reign in the central bank's interest-rate decisions if it is to act swiftly against potential economic risks. In a speech at a Fed conference here, Greenspan argued against proposals that would force the Fed to use a hard-and-fast rule, such as changes in a specific inflation rate, to decide when and how much to change interest rates. Greenspan said the Fed has deliberately shied away from a specific rule to set interest rates because one couldn't adequately respond to economic uncertainties.

The U.S. economy isn't suffering from a housing bubble, Federal Reserve Chairman Alan Greenspan said last week. Greenspan, answering questions after a speech at the Ronald Reagan Presidential Library and Museum, said that even if price increases do slow, it's "doubtful" that such a slowing would cause major problems in the economy. "I personally don't think that there is a housing bubble," Greenspan said at the Reagan library and museum in Simi Valley, Calif. "I don't deny that, overall, after running up quite a good deal, that the rate of increase in housing prices could slow very dramatically and even decline modestly, but that's not likely to be a major negative force.