His move to cut interest rates last week failed to inspire the markets, and the Fed chairman now finds himself in the position he always sought to avoid – having to react to economic developments rather than make his favoured pre-emptive strikes.The financial world is waiting anxiously for Mr Greenspan’s next step, and investors are hoping he will prove that he has not lost his magic touch.. “Since I’ve become a central banker, I’ve learnt to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said.” – Said five weeks after taking office, while joking about the obfuscatory language of central bankers

“I know you believe you understand what you think I said, but I am not sure you realise that what you heard is not what I meant.” – Perhaps the best example in recent history of the obfuscatory language of central bankers, referring to frequent market misinterpretation of his words
“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?” – Said in December 1996, prompting a 170-point drop in the FTSE and 140-point fall in the Dow. The market jitters proved to be a one-day wonder, however, and stock indices continued their relentless upward climb”That was not what I was intending to do at all.

These are very elaborate international markets which are driven by decisions of millions of people. No one can affect them in a fundamental way.” – March 1997, during a grilling by Congress about his December “irrational exuberance” remark. Mr Greenspan was asked why he kept talking the US stock market down”A driver may tap the brakes to make sure not to be hit by a truck coming down the street, even if he thinks the chances of such an event are relatively low.” – July 1997, in reference to the need to be always on the look-out for inflation. The speech as a whole was taken by the market to mean further US interest rate hikes were some way off. The Dow closed above 8,000 at a then record 8,061.65″It clearly would be unrealistic to look for a continuation of market gains of anything like the magnitude of those recorded in the past couple of years.” – Early October 1997, close to the 10th anniversary of the stock market crash and just before a round of market jitters which saw the FTSE lose 11 per cent of its value in just one month”Provided the decline in financial markets does not cumulate, it is quite conceivable that a few years hence we will look back at this episode, as we now look back at the 1987 crash, as a salutary event in terms of its implication for the macro-economy.” – The end of October 1997, in response to stock market falls.

At lunchtime, the Bovespa was trading up 149.22 points – or 2.4 per cent – at 6324.42.
On Thursday, the IMF said it supported the new economic policies proposed by Fernando Cardoso, the Brazilian president, and that there were hopes that Brazil could be “supported financially by the IMF and other members of the international community”. The Brazilian stock market surged by more than 3 per cent soon after opening yesterday, after the International Monetary Fund pledged a rescue package for the troubled economy. However, the rally in the Bovespa index weakened later in the day, after the Dow Jones Industrial Average dipped into negative territory. The damage has been wrought both by trading losses because of turmoil in emerging markets and the drying up of deals in the underwriting of stocks and orchestrating mergers and acquisitions.Brokerage houses have seen their own stock values plunge by up to 70 per cent since the broader market began its slide from its mid-July peak.Even those who escape the axe face disappointment: Wall Street expects annual bonuses to be down by at least 40 per cent.. It has been four years since the industry saw the last flurry of “pink slips”.But with most financial firms now expected to show a 70 per cent slump in profits from the year-ago quarter, some extensive pruning appears inevitable. Most brokerages are expected to register their worst quarter since the last quarter of 1994. In the first half of this year, when the bull still ruled, securities firms were hiring at a gallop and the securities business employed 166,000 people in New York, the highest number on record.

Rumours are swirling that the firm will announce plans to eliminate at least 1,000 jobs from its worldwide payroll, or even as many as 3,000. Cuts are also expected at Bankers Trust.Adding to the gloom is the prospect of as many as 8,000 jobs going at Citigroup, partly as a result of the merger finalised this week between Travelers Group, which included Salomon Smith Barney, and Citicorp. More layoffs may be announced at ING Barings, which has already pledged to cut 1,200 positions worldwide, including 200 in New York.”There is a momentum with firings right now,” said James Ellman, a portfolio manager at AIM Global Financial Services Fund. “It will take at least six months for this wave of firings to stop and for these firms to have a recovery in earnings.”The change in mood has taken hold with extraordinary speed. WITH THE good times already a fading memory, Wall Street is braced for a wave of job cuts as brokerage houses come to grips with sliding markets.