Former Federal Reserve Chairman Alan Greenspan was back to his old tricks of moving financial markets last week as word of his comments at a private dinner leaked out.

At a Tuesday night gathering hosted by Lehman Brothers for a handful of key clients, including some of the largest hedge funds, Greenspan held court on the economy and interest rates, subjects.

Greenspan said that the changes wrought by globalisation and the effects - low long-term interest rates - are a challenge to the Fed, necessitating more increases in short-term interest rates than are currently reflected in market prices. "What a scam, " said Bill Fleckenstein, president of Fleckenstein Capital in Seattle. "It's influence peddling at its finest."

To be fair to Greenspan, it's not his fault Lehman submitted the first or highest bid for his services, then turned around and used him as a patsy to make money. His timing may have been poor, but you can't blame him for wanting to capitalise on his name and ring up the cash register after earning a civil servant's salary ($180,100 in 2005).

Based on the experience of his former colleague, Wayne Angell, the half-life of a Fed governor can be short.

What accounts for Greenspan's ability to move the markets? "We're accustomed to the insights of government officials being authoritative, " said Neal Soss, chief economist at Credit Suisse. "Greenspan's comments may be wise, but they aren't actionable anymore."

You'd never know it from the chatter his comments generated in the marketplace and the reaction in the bond market.

Greenspan didn't violate any laws or Fed regulations when he talked to Lehman's clients. The only other prohibition is representing another party before the Fed for a year after departing. So Greenspan was well within the letter of the law in talking to clients. What about the spirit? Ben Bernanke, Greenspan's successor, hasn't organised his pencil drawer yet, and Greenspan is making noises that have implications for monetary policy.

At minimum, Greenspan evinced bad judgment by not letting some time pass before reasserting himself. His refusal to cede the limelight gracefully to his successor has left a bad taste in people's mouths.

Unlike other Fed governors, who honoured the convention of not attending the final policy meeting before their departure, Greenspan attended the last meeting and dictated the vote. In other words, his comments eight days after the last meeting reflect the Fed's current stance, which until 31 January was Greenspan's stance. So who can blame traders and investors for assuming A equals B?

Greenspan's choice exposed his real agenda all these years, for those who haven't been able to see it:

the cult of his own personality at the expense of the institution.

"He's addicted to power, " Fleckenstein said. "If there is a silver lining in all of this, it's that the more he opens his mouth, the sooner he will be discredited."