Alan Greenspan, former chairman of the Fed, dies at age 100

Alan Greenspan presided over the Federal Reserve for 19 years under four presidents, from Presidents Reagan to George W. Bush. His comment in 1996 about investors' "irrational exuberance" initially shocked the markets, but the bubble didn't burst until 2001. "With a couple of choice words he can momentarily send the stock market to heaven or hell," a Washington Post column said in 1997.

Alan Greenspan, the longtime Federal Reserve chairman known as "the Maestro" who became one of the most influential economic policymakers of his era and famously warned of "irrational exuberance," has died. He was 100. The influential economist died Monday at his home from complications of Parkinson's Disease, said his wife of 29 years, Andrea Mitchell, the chief Washington correspondent and chief foreign affairs correspondent for NBC News. S.

economy for decades under presidents of both parties, but was always honest in acknowledging his mistakes," Mitchell said in a statement. Greenspan was appointed Fed chairman in 1987 by President Ronald Reagan and held the position — through busts and booms — until retiring in 2006. His tenure was the second longest, four months short of that of William McChesney Martin, who presided over the central bank from 1951 to 1970. " During Greenspan's time at the Fed, stock markets prospered but not without periods of extreme volatility.

His loose hand at the central bank is sometimes cited as a cause of the 2008 financial crisis. Ben Bernanke, who was Greenspan's successor and guided the economy through the crisis, noted Greenspan's importance. "He was a great central banker who helped lead his country through almost two decades of prosperity," Bernanke said. "I always found him generous with his time and insights.

" It was his unusual frankness in one televised speech, on Dec. 5, 1996, that set off a bit of market madness. Discussing the challenges of setting monetary policy, he said: "How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?... " The phrase "irrational exuberance" was interpreted as a signal that Greenspan thought the market was overvalued.

The Tokyo stock market, which was open at the time, sank 3% on the comment, and other markets subsequently tumbled. However, the markets quickly recovered and continued to climb until the dot-com bust in 2001. Years earlier, in 1974, when he was chairman of the White House Council of Economic Advisers, Greenspan had to explain on Capitol Hill why the administration wasn't whipping inflation now, as the Ford administration dubbed its war on rising prices. " "Some folks, especially money managers who shovel vast amounts of cash from one pile to another, think about Greenspan a lot," Linton Weeks and John M.

Berry wrote in The Washington Post in March 1997. "They watch his every word, mark his every move, graph his every grin. Because second to the president, Alan Greenspan is arguably the nation's most powerful person.... " In an apparent bid to avoid rocking the markets or not showing the Fed's hand until it was time, Greenspan would cloak his utterances in language that left the sharpest minds — including those of contentious members of Congress — scratching their heads.

" After his retirement from the Fed, Greenspan confessed his strategy for using perplexing language with a clear explanation. "It's a language of purposeful obfuscation to avoid certain questions coming up, which you know you can't answer, and saying 'I will not answer' or basically 'no comment' is, in fact, an answer," he said in a 2007 interview on CNBC. "So, you end up with when, say, a congressman asks you a question, and [you] don't want to say, 'no comment,' or 'I won't answer,' or something like that. So, I proceed with four or five sentences which get increasingly obscure.

" Greenspan was born to Jewish parents on March 6, 1926, in New York's Washington Heights. His father was a stockbroker and financial analyst. As a boy growing up in the 1930s during the Great Depression, the future Fed chairman received an allowance of a quarter a week. "Twenty-five cents, I will tell you, bought a lot more then than it does these days," Greenspan told an audience in 2003.

Greenspan played the clarinet and saxophone and briefly attended the Juilliard School. He played in Woody Herman's jazz band (as did another future White House official, Leonard Garment), before he enrolled in New York University, earning bachelor's and master's degrees in economics by 1950. D. in 1977 — at age 51.

Among his teachers and mentors were the future Fed Chairman Arthur Burns and the free-market proponent Ayn Rand, to whom Gr