Dr. Greenspan, the medicine you prescribed isn't working!

So goes the recurring complaint as the stock market keeps languishing in spite of three interest-rate reductions since the start of 2001 by the Federal Reserve.

There must be a message in this. In fact, you could find several if you went looking for them.

One inference that a teachable investor might draw is that Greenspan, the Fed's chairman these past 13 and a half years, never was quite the king of all markets that the breathless panegyrics made him out to be. One of the most powerful men in the world? Yes. More powerful than the markets? Apparently not.

In the familiar media cycle of "build 'em up, knock 'em down," the higher you take your subject in the up phase, the more dramatic the subsequent down leg can be made to seem.

During the great bull market, many analysts read the chairman's statements as implying a commitment to prevent stocks from falling too far too fast.

Flaw No. 1 with this theory:

It presumed that the Fed, if it wished, had the power to levitate stocks indefinitely whether or not economic growth proved strong enough to justify unending enthusiasm.

Flaw No. 2:

Greenspan, to all appearances a great respecter of markets, surely knew better than to cast himself in that hubristic role. As recent events have shown, he had good cause for caution.

Since Jan. 3 the Fed has pushed down interest rates on federal funds, or overnight loans between banks, in three half-point steps from 6.5 percent to 5 percent. That's about as fast as the U.S. central bank ever moves to stimulate the economy.

Yet the stock market looks as sick as ever. At this writing, the U.S. stock averages are down 9 percent to 30 percent year-to-date, and European and Asian markets aren't faring much better.

Strange now to remember 1999 and early 2000, when all the bulls said that interest rates didn't matter any more because the New Economy ran on rocket fuel from the stock market not greasy, grimy old interest-bearing debt. Now investors are singing a blues version of that same tune..

But if the Fed keeps lowering short-term rates and Congress chimes in with a tax cut, Dudley suggested, bond traders could turn surly too, fearing that all that stimulus might lead to a flare-up of inflation. Then everybody, in stocks or bonds, would be unhappy.

Such a turn of events isn't so hard to imagine. Never underestimate people's capacity to find new causes for gloom when the markets aren't doing well.

But for long-term investors with the requisite patience, history still offers encouragement to the bulls. "It's unwise to fight the Fed," say analysts at Charles Schwab & Co. in a study published on the firm's Web site at www.schwab.com. "There is no perfect predictor of economic or market cycles, but a remarkably reliable one has been interest rates."

Since 1970, Schwab says, the Standard & Poor's 500 Index has averaged a 19 percent gain in years when the federal funds rate dropped, compared with a 9 percent rise in years when the rate rose.

By Schwab's reckoning, the one year in the last 31 during which rates fell and stocks declined anyway was 1990, when the S & P; 500 dropped 3.2 percent. The next year, 1991, with rates still coming down, the index made up for lost time with a gain of 31 percent.

Will events unfold in precisely the same way now? Of course not. Neither the Fed nor anybody else can conjure up a stock market recovery on demand. But patient stock-market investors have a much better shot at benefiting from the Fed's interest-rate cuts than do those who insist on getting their money right away.

Chet Currier is a columnist for Bloomberg News.

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