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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (53212)	2/9/2006 11:49:23 AM
From: russwinter	Respond to of 110194

When Greenspan does this cheerleading, it has the effect of falsely propping the USD and delivering the standard Pig Man refrain, and thus sucking in FCB and foreigners to buy the big Treasury refunding. Market manipulation at it's finest, they seem to do it over and over. Reuters Greenspan upbeat on economy at private events Wednesday February 8, 4:22 pm ET By Victoria Thieberger NEW YORK (Reuters) - Just a week after leaving the Federal Reserve, former Fed Chairman Alan Greenspan made upbeat remarks on the U.S. economy at several private events, sources said on Wednesday, causing a stir in financial markets worried about future interest rate hikes. Sources said Greenspan spoke at an event hosted by Lehman Brothers in New York on Tuesday. His successor, Ben Bernanke, has made only brief remarks as part of a ceremonial swearing-in ceremony. According to one source who saw a summary of the Lehman Brothers event, Greenspan suggested that the low level of long-term bond yields may mean official interest rates would have to go higher than they otherwise would to slow the economy. Another source said Greenspan also spoke at a small private lunch at Lehman Brothers on Tuesday, and the Times of London newspaper reported the former Fed chief also made comments on the high price of gold via video link to an audience of international investors in Tokyo. Some market watchers expressed surprise Greenspan would discuss the economy so soon after leaving the central bank. Interest rate futures dropped and the dollar firmed after reports of Greenspan's comments circulated in the markets. With Wall Street uncertain as to how many more interest rate hikes lay in store, futures markets quickly raised the chances of further tightening by mid-year. "He did speak at Lehman yesterday afternoon," said a source at Lehman Brothers who did not attend the event. The event was mentioned on Wednesday morning over Lehman's "squawk box" public address system to the trading desks. A Lehman Brothers spokeswoman did not return calls seeking comment. ON THE SPEAKER CIRCUIT The Times of London reported that Greenspan earned $120,000 for his video appearance to a Tokyo audience. Market speculation was that the Lehman dinner would have commanded more than $100,000 as well -- totaling more than Greenspan's annual salary at the Fed, which was $180,100 in 2005. Greenspan retired from the Fed on January 31, the day he chaired his last Federal Open Market Committee meeting, after 18-1/2 years at the head of the U.S. central bank. At that meeting, the Fed raised official interest rates for the 14th time in the current tightening cycle, to 4.5 percent. That the former Fed chief would make any comments on the economy to a private audience so soon after leaving his post raised some eyebrows. "I'm surprised (Greenspan) would want to offer his opinions in the private sector so quickly after retiring from the Federal Reserve," said one market participant, who requested anonymity. "Bernanke has (barely) uttered a word in public yet and here you have the ex-Fed chairman running around talking," the trader said. The speed with which Greenspan appears to have joined the speaking circuit irked some analysts. "The views of the Chairman are most actionable right now and will become less actionable as time progresses. He knows this, the Street knows this, and so do the rest of the investment community unlucky enough to hear about it hours after the fact," said David Gilmore, partner at the research firm FX Analytics. A spokeswoman for Greenspan Associates, a Washington-based consulting firm led by the former Fed chief, declined to comment. "Board members who complete their terms may meet with and speak to groups without restriction, provided that they reveal no confidential information," a Fed spokesman said. Market sources said Greenspan suggested the markets were underestimating the amount of tightening the Fed has to do. Short-term interest rate futures fell on talk of Greenspan's speech, reflecting increased views that fed funds will hit 5 percent by mid-year. Chances of fed funds at that level hit a new high of 82 percent, from 66 percent earlier. "(Greenspan) did say that the U.S. economy was stronger than he thought and that was put out on Lehman's squawkbox," said one market source, who spoke to one of the attendees at the Lehman event. "The other thing about him saying that the markets are not discounting the right amount of tightening, I think that is what the people heard on the Lehman squawkbox," the source said. "They heard that, but he didn't really say it. It was an interpretation made by the guy we talked to at Lehman." The dollar edged to session highs against the euro (EUR=) after reports of Greenspan's remarks circulated in the market. "There were a lot of rumors going around about comments that Mr. Greenspan made," said John McCarthy, director of foreign exchange trading at ING Capital Markets LLC in New York. "One was regarding the housing market," he added. The Times of London report said Greenspan said the high price of gold is due to investor concern about major geopolitical conflict, Greenspan also told the audience of international investors that cheap oil prices were a thing of the past due to a lack of oil refining capacity, the report said. It cited members of the audience in an article that was published online and in print.

To: UncleBigs who wrote (53212)	2/9/2006 12:27:44 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

In an ultimate irony, it appears that risk taking is so intense and credit premiums are so low, who really needs credit insurance? MBI is struggling to write business, says they "are facing competition".: finance.yahoo.com Of course the real problem for this outfit is when they will have to pay claims on all the junk they've underwritten.