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*                       FIEND'S SUPERBEAR MARKET REPORT                     *

*                                 June 23, 2026                             *

*                                                                           *

*                       e-mail: fiendbear@fiendbear.com                     *

*                    web address: http://www.fiendbear.com                  *

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Fiend Commentary
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The Maestro, the Put, and the Market He Helped Create

Alan Greenspan died at 100, and for financial markets his passing feels like more than an obituary. It feels like the closing of a chapter that may still be shaping the one we’re living through today.

Greenspan chaired the Federal Reserve from 1987 to 2006, serving under four presidents and presiding over the 1987 crash, the 1990-91 recession, the long 1990s expansion, the dot-com bubble, the post-9/11 period, and the early stages of the housing bubble. He was called the “Maestro,” and for a long time Wall Street meant it as praise.

But Greenspan’s deeper legacy may be simpler than all the speeches and Fed-speak: he taught markets that the central bank would show up when things got ugly.

After the 1987 crash, the Fed quickly signaled that it stood ready to provide liquidity to the financial system. At the time, that may have been the right move. A crash had to be contained. Panic had to be stopped. The machinery of finance had to keep functioning.

The problem is what came later.

Markets learned the lesson too well. Every crisis became a reason to expect help. Every big selloff became a possible buying opportunity. The “Greenspan put” was born — the idea that the Fed might not explicitly target stock prices, but would act in ways that protected the market when losses became large enough.

That idea did not die with Greenspan. It became institutional muscle memory.

Bernanke expanded it during the financial crisis. Yellen maintained an easy-money mindset. Powell fought inflation for a while, but even under Powell markets remained trained to watch for the pivot, the pause, the liquidity facility, the balance-sheet expansion, or the first hint that the Fed was ready to cushion the downside.

That is the world Greenspan helped build: one where investors fear missing a Fed-supported rally more than they fear valuations.

The comparison with his predecessors is instructive.

Arthur Burns, who chaired the Fed in the 1970s, became the warning label for what happens when inflation is explained away for too long. Burns did not like inflation, but under his watch the Fed was too slow, too political, and too willing to treat price pressure as a series of special circumstances. Oil shocks, wage pressures, government policy, unions, foreign events — all of it became a reason to hesitate. The result was the Great Inflation.

Paul Volcker was the opposite. He understood that inflation psychology had to be broken, and he was willing to take the pain. His medicine was harsh: high rates, recession, anger, political pressure, and a lot of short-term damage. But Volcker’s legacy is credibility. He took away the punch bowl and let the market scream.

Greenspan came after Volcker and inherited that hard-won credibility. Then he used it to run a very different style of Fed: less brute force, more finesse; less anti-inflation shock therapy, more market management. For a long time it worked beautifully. The 1990s were the golden age of the Greenspan reputation: strong growth, booming stocks, falling inflation, and a Fed chair who seemed to understand the machine better than anyone else.

But the cost of that success was complacency. Greenspan believed too deeply in markets’ ability to self-correct. He was slow to confront bubbles and too trusting of financial innovation. The housing and credit excesses that exploded after he left the Fed were not entirely his creation, but they were certainly part of his legacy.

That is why his death comes at such an interesting time.

We are once again in a market that seems to believe the central bank will not allow real pain. Stocks are near records. AI and semiconductor shares have gone nearly vertical. SpaceX has become a speculative monument almost overnight. And yet inflation remains sticky, bond yields remain elevated, the economy is uneven, and geopolitical risks have not truly disappeared.

This week’s new Curmudgeon article, “Chart-o-Rama Depicts Severe Systemic Risk for U.S. Equities,” is useful because it shows the other side of the party. The charts point to a market with very little margin for error: margin debt surging, public stock exposure extremely high, valuations stretched across nearly every major metric, and equity risk premium near or below zero. One especially important point is that margin debt has reportedly surged to roughly $1.4 trillion and more than doubled since 2023 — the kind of leverage that helps markets rise fast, but can also accelerate declines when the selling starts.

That is the Greenspan problem in modern form.

If investors believe the Fed will always rescue the system, they take more risk. If they take more risk, the system becomes more fragile. If the system becomes more fragile, the Fed eventually feels forced to rescue it again. The cure becomes the cause of the next illness.

So where does that leave the new Fed chair?

It is too early to judge Kevin Warsh. He has talked tougher than markets expected, and his first press conference suggested he understands the inflation credibility problem. But the true test is not a press conference. The true test comes when stocks are falling, credit is tightening, unemployment is rising, and the White House wants lower rates immediately.

That is when we find out whether he is Volcker, Burns, or Greenspan.

A Volcker-like Fed would risk recession to defend the currency and crush inflation expectations.

A Burns-like Fed would find reasons to wait, explain away the data, and hope the inflation problem solves itself.

A Greenspan-like Fed would talk about discipline but act quickly to protect the financial system once markets start breaking.

History suggests markets are betting on the third option.

That may be the most important legacy Greenspan leaves behind. He did not just run the Fed. He changed the way investors think about risk. He made the central bank part of the valuation model. He helped create a market that expects policy to lean against pain and let speculation breathe.

Maybe Warsh breaks that pattern. Maybe he decides credibility matters more than asset prices. Maybe inflation forces him to be tougher than Wall Street expects.

But until proven otherwise, investors still seem to believe the Greenspan put lives on.

And if the Curmudgeon’s charts are right, this is a dangerous time for that belief to be tested.

 

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