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."