Alan Greenspan is alive and well and headed for Wyoming.
While death will one day befall everyone, rumor had it Tuesday that it had befallen Greenspan specifically, causing a slight weakening in some dollar contracts and causing much chatter on trading desks.
It ain't so.
spokesman refused as a matter of policy to confirm or deny that Greenspan is alive, he did note that an upcoming speaking engagement, in Jackson Hole, Wyo., remains scheduled as planned.
The rumor pressured the U.S. dollar, but Treasury prices remained afloat. The 10-year note rose to 98 6/32, sending the yield down 5 basis points to 4.48%, as investors decided the recent selling in bonds had gone too far.
The dollar reached its lowest level against the euro in four months, dropping to $1.0874 per euro after hitting $1.08 earlier in the day. The greenback was traded at Y117.31 against the Japanese yen.
"If it were true, it would be the straw that broke the camel's back: it would be bad for U.S. stocks, for bonds and a blow to the dollar," said Ashraf Laidi, chief currency analyst at MG Financial.
Laidi sees Fed Governor Ben Bernanke as a credible successor to Greenspan. "He is definitely well-respected and has been the loudest voice among Fed members in terms of a policy to combat deflation."
Speculation about the 77-year old Greenspan's health is a fixture of the U.S. financial markets. In late April, Greenspan had surgery to treat an enlarged prostate, considered common among men his age. Although the condition has some similar symptoms to those of prostate cancer, the Fed chief was reported to be out of risk for the disease at the time.
Greenspan's influence over interest rates, and consequently the health of the U.S. economy, is so great that, at the time, the Fed waited until the markets closed to announce the surgery would take place.
The chairman has been serving at the Federal Reserve since August 1987. His current term expires on June 20, 2004, but he already has accepted an invitation by President Bush to serve another four-year term as Fed chairman, the fifth in his career.
Chalk Tuesday's rumor up to a slow day in the market.