Leadership - A discussion of traits, characteristics, and current news of leaders.

Two letters, “N-O” and the stock market takes a dive. Fed Chairman Ben Bernanke is finding out that even small words spoken in social events can move markets.

In a conversation at the White House Correspondents' Association Dinner last month Bernanke responded to a CNBC anchor Maria Bartiromo’s question about whether the media and financial markets were right to think that he had signaled the Fed was done raising interest rates. He said "no" and  Bartiromo reported such on her program.  The market took an immediate fall.

I have been meaning to offer my review on an article in the Wall Street Journal on former Fed Chairman, Alan Greenspan. It was written on January 31, Greenspan’s last day as Chairman.

Greg Ip, the article’s author does a great job analyzing Greenspan’s leadership style. I think there are some important tenants of leadership that Ip has drawn.

The title and subtitle of the article are revealing.


Results Not Theories – In a position often driven by theory, hypothetical models and forecasts and political agendas, the former Fed Chairman understood that performance was his measuring stick. Great leaders in any arena know this. Results matter. Coaching style, game plans, strategies are meaningless if they do not put a mark in the win column. If you can’t deliver the goods, you will not succeed, be remembered or have a legacy. Beyond just results, true greatness is delivering results in a crisis or under difficult circumstances. Take a note from Michael Jordan who everyone knew – including the opposing team, that he would find a way to win in every big game.

MidMarketMaven, while a fan of former Fed Chairman Greenspan didn't appreciate his 11th hour increase of interest rates:


I agree with MMM, he is not an economist (neither am I).   I also agreed with him on his point about Greenspan's last rate change.  I cannot make a persuasive economic argument like MMM but I considered the Greenspan's move from a leadership and transition stand point.

Making significant decisions on the eve of a leadership change isn't good form.  In this case it probably forces Bernanke to sit on his hands and wait for a crisis as Greenspan tightened one last time - "Uncle."   Bernanke may not have a chance to make some small moves before he faces more significant challenges. His ability to lead out of the gate was weakened by Greenspan's final call.

I hope, as Mathew Stinson noted, that the change in the Fed leadership is not lost in the


After all, back in October when Ben Bernanke was announced as the replacement for Fed Chairman Alan Greenspan, the New York Times noted that Bernanke would become the “most powerful economic leader in the world.”

Greenspan’s shoes will be tough to fill. I am sure many said the same in 1987 as Greenspan took the helm from Paul Volker in 1987. But Greenspan has had an unprecedented run.

Greg Ip, from the Wall Street Journal wrote,

Ben Bernanke was sworn in Wednesday to be the 14th chairman of the Federal Reserve.

From AP via Yahoo

Transition leadership requires clear vision and objectives that are communicated by the incoming leader.  Most often actions speak louder than words.  Markets, countries, banks and Capitol Hill will have their eye on Bernanke as he begins his tenure as the new Fed Chairman.

I can’t remember everything in the past 20 years but certain things stand out. Some of the most memorable events of my career track the challenges faced by Fed Chairman Alan Greenspan.

One was the stock market crash of October 19, 1987. I had received a degree in finance a year before and was working for a finance company. I was a year from entering the Graduate School of Business at the University of Chicago and a hoping for a career on Wall Street.

1987 was the year President Ronald Reagan appointed Alan Greenspan as the new Chairman of the Federal Reserve. In my mind, as a student of economics and finance, it seemed impossible to replace the towering Paul Volcker who in the early 80s had reigned in the worst unemployment and inflation since the Depression.

Greenspan was tested immediately as he faced the largest stock market crash since the crash of 1929. The Dow dropped 508 points and 22% -- only 69 days into Greenspan's tenure. On day after Black Monday, Greenspan signaled the Fed's commitment to keep financial institutions afloat pledging "to serve as a source of liquidity to support the economic and financial system." Following the crash, the Fed injected roughly $6 billion dollars a day into the economy.

Journalist and author Peter Hartcher wrote,