Book Maven: Greenspan Outs Greenspan

To this end, I want to walk you through the several parts of the book that are designed to solve some of the mysteries of Greenspan's involvement with the business media, my area of interest. While we heard a lot over those two decades from the media about Greenspan, we did not hear much from Greenspan about the media.

Mystery Number One: CNBC's "briefcase indicator." This omen held in somewhat playful terms (that were often taken seriously) that when Greenspan walked to Federal Open Market Committee meetings with a thin briefcase, his mind was clear and the economy was moving along swimmingly. A thick briefcase meant the opposite: He had been hunched over economic figures right up until the time of the meeting, the economy was troubled, and a rate hike loomed.

Despite the obvious lack of lasting correlation between the thickness of Greenspan's briefcase and rate cuts, the "briefcase indicator" became business media and Wall Street lore. And because of the obvious lack of correlation, I believe Greenspan's simple but hilarious explanation: "The fatness of my briefcase was solely a function of whether I had packed my lunch."

Mystery Number Two: Greenspan's own take on his famed "irrational exuberance" speech, when he uttered the words that would come to define an economic era. Here, I don't trust Greenspan's falsely modest "What, me?" explanation. The speech in which he mentioned "irrational exuberance" was -- like all his public talk -- perfectly calibrated. He would never have used such explosive words, even buried so as not to immediately bury the economy, deep in the text.

But Greenspan claims that he was a bit blindsided by the business media's extraction of this phrase, innocently puzzled that they ran with this as their takeaway.

Wrote Greenspan, in aw-shucks mode:

Admittedly, this [the speech] was not Shakespeare. It was pretty hard to process, especially if you'd had a drink or two during the cocktail hour and were hungry for dinner to be served. When I came back to the table, I whispered to Andrea [Mitchell, his television reporter wife -- we'll get there] and the others seated there, "What part of that do you think will make news?"

What an ingenue, huh? He didn't even know that, though it was needed, pulling the rug out of the entire economy by saying its strength was in large part the function of the overactive imagination of investors would cause a stir.

Mystery Number Three: As an adviser to President Ford, Greenspan was thought to have hurt his election chances with a quote, eventually traced back to him, that the economy was "pausing." I never understood why, strategically, he would say such a thing. It wasn't really true in a larger sense. Was he trying to court favor with Carter, assuming he would win? But Greenspan seemed otherwise to be loyal to Ford.

Sure enough, those words were taken out of context. Hear a fuller portion of what Greenspan said and you understand that he saw otherwise strong growth in one of several brief, periodic lulls. Interestingly, too, Greenspan is obviously fond of Ford as a person more than any other president. In a statement both acerbic and telling, he says that Ford would probably perform better on psychological tests than any other president. He attributes the rise of a more normal man to the presidency to the fact that he didn't need to be elected to office.

Mystery Number Four: Last, I always wondered how a man with such a love-hate, understood-misunderstood relationship with the media ended up marrying a member of the Fourth Estate. What was his rap? Hilariously, Greenspan lays it all out there. At his first dinner date with Mitchell, Greenspan asked her back to his place. To read an essay he wrote on monopolies.

Smooth.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting