Saturday, January 28, 2006

New Federal Reserve Chairman

Alan Greenspan is retiring on Tuesday and the Senate is expected to confirm Ben Bernanke as his successor. The reality is that there is no way that Bernanke can ever be as effective as Greenspan. However, what is possible, is a hangover effect. What Greenspan has done over the last 18 years is create a foundation. It can get screwed up, but probably not overnight. What becomes likely then, is a legacy effect. The economy could coast, or even soar, for a period of time; sparked by Greenspan's foundation. Nevertheless, for many years, Wall Street was always subject to rumors about when Greenspan would retire and what would happen. Many investors singlehandidly credit Greenspan with the robust economy we have had under his tenue-- which began with a recovery from the 1987 stock market crash and resulted in the booming late 1990's, and the current recovery from the 2002 economic dip. Only time can tell.


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