Word: greenspans
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Dates: during 1990-1999
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...just long enough to get everyone back on pins and needles again. Well, never mind. The Producer Price Index for June, which measures inflation before it hits the consumer, actually dipped an unexpected 0.1 percent, reported the Commerce Department on Wednesday. The stock markets, thus relieved anew about Alan Greenspan?s plans for August, did a little jig at the opening bell ? but then took a dive into negative territory by noon. What gives? Despite the good news, says TIME senior economics reporter Bernard Baumohl, all is not well on the Street these days...
...game the Fed. For weeks on end I heard talking head after talking head spouting that the Federal Reserve Board was about to embark on a string of tightenings to cool down the economy. The Fed watchers had it all figured out. Fed Chairman Alan Greenspan had repeatedly leaked that the rollicking days of a strong economy were over. He was going to put the brakes on the longest peacetime advance with a series of rapid-fire interest-rate hikes that would send the stock market into a tizzy...
...wouldn't you know it, Greenspan was doing nothing of the sort. He was actually creating a month-long, super-duper buying opportunity. After all that hand-wringing, accompanied by a rocky sell-off of so many stock favorites, we get a wee little quarter-point hike and a flat statement saying the Fed is no longer biased toward tightening. Greenspan gave you a total green light to get long stocks...
...short-term takeaway is that those who were too bearish because they feared the mighty Fed got faked out again. Sure, the Fed must stomp on the brakes periodically. But remember, the Fed always favors prosperity long term--how could it not? By removing the bias, Greenspan has removed the speed bumps, and if you waited until the all clear was sounded, you missed a true romp in the averages...
...weeks, it seems, the nation was on "Fed watch," as commentator after commentator opined on the Fed's desire to cool things down. (For the record, this talking head told you to take a vacation from the market this week so you would not have to think about Greenspan...