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To: Jaakko who wrote (3207)	11/16/1997 6:12:00 PM
From: Alex	Respond to of 116837

GREENSPAN'S MILLIONS By ADELE MALPASS ------------------------------------------------------------------------ The man whose words move the world's stock markets keeps the bulk of his personal fortune in cash. Federal Reserve Chairman Alan Greenspan - who sparked a stock selloff late last year with his "irra-tional exuberance" speech, only to watch stocks promptly recover and climb even higher - keeps about $2 million in cash, according to his most recent financial disclosure statement. Greenspan, who earns $133,600 a year in salary, is believed to be worth about $5 million, according to some Fed watchers. Former FDIC Chairman Bill Seidman was surprised he held such a large cash position, but said, "Greenspan thinks we're heading for a crash. He's putting his money where his mouth is and making a statement about irrational exuberance." In addition to the cash, Greenspan, 71, also had between $1 million and $5 million in two blind trusts as of June, according to the report, which he is required to submit once a year. The actual stocks in the trust aren't known, but Greenspan's money manager is known to favor blue chips. These trusts were established shortly after he joined the Federal Reserve 10 years ago, in order to avoid any conflicts of interest. However, the newly married Greenspan recently notified officials that he planned to start managing his own portfolio so he can consolidate his investments with wife Andrea Mitchell, the NBC News correspondent. "In the spring of this year, I was married and my wife and I will need to coordinate our investments and financial planning. The existence of the blind trust makes this effort difficult," Greenspan said in a letter to the Office of Government Ethics. The letter gave no indication that Greenspan plans to eventually have a new blind trust with Mitchell. A lawyer at the Federal Reserve said, "Now the chairman can manage his own investments and be the decision maker." For the last seven years, Mr. Greenspan's money has been at Oppenheimer Capital and managed by its chairman emeritus, Charles Brunie, a supply-side conservative. Mr. Brunie has known the chairman for nearly 38 years and met him at an Ayn Rand lecture when Mr. Greenspan lived in New York. Mr. Brunie's investment style is consistent with a value-oriented, buy and hold approach. He favors big-name companies. Mr. Greenspan still has an account with Oppenheimer Capital. The Fed chairman put his cash in five different money-market accounts. He uses some of the biggest names in the business such as Fidelity, T. Rowe Price, Kemper and Merrill Lynch. In theory, money market accounts minimize conflict of interest concerns because the Fed does not directly regulate mutual funds or money-market accounts. However, money-market accounts do provide better returns if the Federal Reserve raises interest rates. "Greenspan can't keep his cash under a mattress. He has to put it someplace," said John Lonksi of Moody's Investor Service. However, he added that, "having such a large cash position isn't exactly a vote of confidence for the stock and bond markets." Mitch Slater, a financial planner with Merrill Lynch, looked over Greenspan's portfolio and concluded, "He's way too conservative in his investments." Greenspan also received nearly $25,000 from two publicly traded companies, General Foods and Automatic Data Processing. Before becoming Fed chairman, Greenspan served on the board of directors of these companies and received deferred compensation. He also owns about $500,000 in state municipal bonds. "Muni bonds are a good investment for Greenspan, they're safe and free of federal taxes," said Slater.