Alan Greenspan's Comeback Tour

"We expect the ECB to opt for the more aggressive 50-basis-point easing action," in part because of "rising expectations that the U.S. interest rate disadvantage will be further[led] by the Fed's resilience to combat deflationary pressures," Ashraf Laidi, chief currency strategist at MG Financial, commented Wednesday. (Spurred, perhaps, by Greenpan's bluff, the ECB did opt for a more aggressive 50 basis point rate cut on Thursday.)

Heading into Thursday's meeting, the ECB's short-term rate was 2.50%, double the fed funds target rate. The 125-basis-point differential between the two has helped spur the euro's 24% rise vs. the dollar in the past year, including its record high above $1.19 on May 27. But the euro's strength has started to crimp European exporters, something the ECB is being forced to address.

In addition to placing greater onus on the ECB to ease, Greenspan also wants a weaker dollar to help U.S. manufacturers and put upward pressure on import prices, which fights deflationary pressures -- real or imagined.

Sailing Away to Key Largo

The irony is Greenspan is having it all at a time when his reputation is arguably at its nadir since he became chairman in 1987.

Notably, "monetary policy" is far down the list of reasons even the most bullish equity market participants cite for the market's recent surge. Recent tax cuts, improving corporate profitability, the relatively quick end to the war, the absence of more terror attacks on American soil, even prospects for peace in the Middle East are often mentioned as reasons for the rally before the Fed's policies.

"People are betting we're going to maneuver through despite him," said Jim Bianco, president of Bianco Research in Chicago. "He's like the popular baseball player in the twilight of his career. That's how the pros [on Wall Street] feel about Greenspan: His best days are behind him."

Bianco, a longtime critic, said Greenspan's fall from grace was sealed by his flip-flop on the issue of tax cuts and ham-handed defense of his failure to identify the equity bubble in a speech at Jackson Hole last August.