KAUFMAN SAYS GREENSPAN NOMINATION BAD FOR BONDS
  Henry Kaufman, managing director of
  Salomon Brothers Inc, said the nomination of economist Alan
  Greenspan to replace Federal Reserve Board Chairman Paul
  Volcker is bearish in the near term for the fixed income and
  currency markets.
      "The basic direction of interest rates is not changed. The
  fundamental direction of interest rates continues to be upward,
  interrupted by intermittent rallies," Kaufman said in a
  statement. He said the implication for equity markets in
  neutral to bullish.
      Kaufman said, "Unlike Paul Volcker, who entered the office
  of the Federal Reserve chairman with strong credibility both
  domestically and internationally, Mr Greenspan will have to
  demonstrate both his competence and policy independence before
  he can gain full confidence of the financial markets."
      Greenspan is most knowledgeable on the behavior of the U.S.
  economy, while his professional skills in the international
  area are much more limited, Kaufman noted.
      "Consequently, although he is well known abroad, his views
  on issues such as the Less Developed Country Debt may initially
  carry less weight than have those of Mr Volcker."
  

