The Man Who Knew: The Life and Times of Alan Greenspan — Twenty-four: “UNCLE ALAN WILL TAKE CARE OF US”

1. 1. CNBC's 'briefcase indicator'—monitoring the size of Greenspan's briefcase for clues on interest rates—became a popular gimmick, though Greenspan joked the size depended on whether he packed a sandwich.
2. 2. Greenspan's cult status was fueled by the 1990s cable news boom, particularly CNBC, which broadcast his every word live to day traders.
3. 3. The United States' post-Cold War economic dominance—driven by technology, market-based systems, and productivity gains—was personified by Greenspan.
4. 4. Brooksley Born, chairwoman of the Commodity Futures Trading Commission, proposed regulating over-the-counter derivatives in 1998, warning that without central clearing and margin requirements, a default could trigger chaos.
5. 5. Greenspan, Rubin, and Summers opposed Born's proposal, arguing that regulation could drive derivatives business overseas and that traders could manage their own risks.
6. 6. Born published her concept release in May 1998 despite opposition from Treasury, the Fed, and the SEC, but the joint statement from those agencies ensured it never gained traction in Congress.
7. 7. Long-Term Capital Management (LTCM), a hedge fund founded by Nobel laureates and former Fed vice chairman David Mullins, lost $1.9 billion (44% of capital) by August 1998 due to Russia's default and market turmoil.
8. 8. Despite his laissez-faire principles, Greenspan authorized the New York Fed to intervene in LTCM's collapse, fearing a $500 billion fire sale could freeze markets.
9. 9. Greenspan signaled a rate cut in September 1998 testimony, and the Fed cut rates three times by October, despite strong economic growth and minimal market decline.
10. 10. Greenspan rejected a second attempt to regulate derivatives from within Rubin's Treasury, which proposed centralized clearing and SEC oversight of investment bank derivatives subsidiaries.
11. 11. Greenspan's preemptive rate cuts after LTCM cemented his reputation as 'Uncle Alan' who would take care of Wall Street, but critics argued he was pouring gasoline on a bubble economy.
12. 12. Time magazine's February 1999 cover featured Greenspan, Rubin, and Summers as 'The Committee to Save the World,' celebrating their management of the Asian and Russian crises.