(2 of 2)
Wall Street economists are baffled by Greenspan's thinking. "If the wealth effect continues to boost demand, then why can't productivity continue to boost supply?" asks Edward Yardeni, chief economist of Deutsche Bank. The mere absence of inflation suggests that productivity is doing the job of keeping consumers happy. But if the chairman is intent on reversing some of the bull market, look out. His speeches and rate increases have already unnerved some investors. Despite Friday's jump, the Dow Jones industrial average closed the week at 10,367, down 10% so far this year. The S&P 500 index is down 4%.
But the high-tech-heavy NASDAQ is up 20% this year and hitting new records virtually every week. Those investors have a message of their own: Give us back the old Greenspan.