With the markets teetering and investors a far sight from sangfroid, Federal Reserve Chairman Alan Greenspan spoke to Congress today. This is a big event for market-watchers, sort of like an all-star game (that doesn't end in a tie) in baseball. Here are the headlines leading up to Al's speech:
- Dollar Vulnerable, Seeks Greenspan Help
- Asia Stocks Slide Ahead of Greenspan
- Stocks and Dollar Tumble, Await Greenspan
- Can Fed's Greenspan Soothe the Markets?
So, with Wall Street watching and hoping, Al spoke. Here are snippets from his testimony, along with our translation:
"Spending will continue to adjust for some time to the declines that have occurred in equity prices." -- We're all broke from the market crash, so don't expect us to spring for that new swimming pool this summer.
"By early this year, with inventory levels having apparently come into better alignment with expected sales, the pace of inventory reduction began to ebb, and efforts to limit further drawdowns provided a considerable boost to production." -- I read Rex Moore's helpful two-part series on inventory analysis.
"The difficulties of judging earnings trends have been intensified by revelations of misleading accounting practices at some prominent businesses." -- Can you believe those idiots at Enron and WorldCom?
"Manifestations of lax corporate governance, in my judgment, are largely a symptom of a failed CEO." -- I blame investing's sad lexicon: Skilling, Ebbers, and chance. Ruthlessly pricking our gonfalon bubble: Skilling, Ebbers, and chance.
"With profitable opportunities for malfeasance markedly diminished, far fewer questionable practices are likely to be initiated in the immediate future." -- Because the market's in the crapper these days, you won't be seeing as much abuse from management.
"The effects of the recent difficulties will linger for a bit longer but, as they wear off, and absent significant further adverse shocks, the U.S. economy is poised to resume a pattern of sustainable growth." -- Like anyone, I have no clue what will happen in the near future, but we'll be fine in the long term.
And we'll leave it at that. Thanks, Mr. Chairman!
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