“Ooh yeah, I still got it, baby”
Alan Greenspan continues to flex his muscles in the marketplace. One perspective is that it’s somewhat irresponsible for Greenspan to go around making the types of comments he has been making, but from the other perspective he deserves to be allowed to do what he knows best – the moral issue considerably gets stickier if the firms he represents are front-running his comments, which I expect is the case. Also, Greenspan knows his credibility will fade over time, so why not make hay while the sunshines? I see a self-reinforcing mechanism at work here: if the market reacts strongly following his comments, then they will pay greater attention to him next time he speaks. However, if the market manages to shrug off his words then this makes each subsequent speech that much less important.