Greenspan: Good chance of U.S. recession

Source: MSNBC

BERLIN - The likelihood of the U.S. economy slipping into recession is at least 50 percent, former Federal Reserve Chairman Alan Greenspan was quoted on Wednesday as saying.

“I believe the probability of a recession is at least 50 percent, but up to now there are few signs that we are already in one,” Greenspan said in an interview with weekly newspaper Die Zeit published in German. “In my opinion, it will probably happen but the facts suggest we are not there yet.”

Asked whether central bankers and financial policymakers could head off a U.S. recession, Greenspan said: “Probably not. Global economic influences today are stronger than almost anything that monetary or fiscal policy can counter them with.”

“Long-term real interest rates have significantly more influence on the core of the economy than decisions by national governments,” he added. “And central banks have increasingly lost the ability to influence these long-term rates, whereas 20 or 30 years ago they still dominated there.

Read more: http://www.msnbc.msn.com/id/22915257/

Record unemployment? Record inflation? Record foreclosures? Record debt?

Nah, no signs of recession here.

A recession has a specific meaning to these folks, and as yet we have NOT seen even one quarter of declining GDP, let alone two in a row. It's possible, as Greenspan says, that this quarter will show a decline, but nobody knows yet and a professional economist is certainly not going to definitively decaler that we will.

I certainly suspect we will see a recession soon too, albeit I don't expect anything all that dramatic or long lasting in historical terms (not much chance IMO of 7%+ unemployment or more than 3-4 quarters of mild contraction for example) such as the Chicken Littles have been heralding.

A very common term in the analytic school is "recessionary". That means it looks like, acts like, and shows all the signs of recession except for the negative growth.

This economy has been like that for at least 5 years. The only thing propping it up is excessive gov't borrowing and consumer debt. Obviously, that's unsustainable.

And, models (including one of my own) have shown that gov't borrowing beyond a certain fraction of GDP has negative leverage on economic behavior. Meaning that cutting taxes and spending like mad-people, will end up squeezing the economy down.

So, all of us don't think like that.
The Professor

You of course realize that any vague hint of any "r" word from him would be harmful and premature. Nobody but a handful would understand the subtle differences between recession and recessionary and somebody whose every word still causes the markets to jump would be foolish to pre-emptively declare a recession.

A reminder - I don't doubt one is in the cards soon. I just doubt it will be the next depression and I don't think prominent economists would be responsible in declaring a recession ahead of the traditional 2 quarters.

Thanks for all your help creating this mess.

market bounces up by 90 points (whoopeee :sarcasm:) only to drop all of that and more... All in a space of two hours.

Wonderful.

If we are not yet in a recession, I wonder what a recession is gonna look like.

... we peons out here would never have seen it coming without you giving us a heads-up.

Jesus wept.

on the upside, he's Andrea Mitchell's problem now.

:silly:

He had his chance to speak out about the ass backwards financial moves in this country during his tenure...and he did NOTHING.

They'll soon be naming an airport after him. We have our heads so far up our asses, it doesn't even make sense.

I'm just finishing George Orwell's 1984. Give it a read. We are idiots, and that's what was predicted over 60 years ago in his book. Up is down, white is black, truth are lies and lies are truth.

Welcome to the F*cked up States of America. Idiots....we are led by idiots, and we are idiots for following like sheep.

Whodathunkit ? It's the sort of thing that happens when you constantly poke your nose in the affairs of other countries and take your eye off the ball at home.

Like everything else, everyone else already knows...except America.

Due to the lack of regulation reigning during his tenure.

http://www.washingtonpost.com/wp-dyn/articles/A36514-2005Mar15.html

Federal Reserve Chairman Alan Greenspan yesterday defended his support of tax cuts in 2001 after Sen. Hillary Rodham Clinton (D-N.Y.) suggested that he bears some blame for helping create the federal budget deficits that followed those cuts.

But Greenspan, testifying at a congressional hearing, also said "we were all wrong" in early 2001, when he and other government economists forecast huge federal budget surpluses for years to come.

Greenspan, addressing the Senate's Special Committee on Aging, again expressed support for creating individual Social Security accounts, saying a "major attraction" of the idea is the opportunity to segregate some payroll tax revenue from the rest of the federal budget so Congress cannot spend it.

"We need, in effect, to make the phantom 'lock boxes' around the trust fund real," Greenspan said, referring to suggestions in the late 1990s of finding some way to prevent Congress from spending surplus Social Security revenue.

...more...

No.

Just you idiots.

Reading that quote almost made me stroke out on the spot.

Every economist with an ounce of common sense predicted this would happen. Just as they predicted it before the Reagan tax cuts.

We were all wrong?

If by "we" you mean the entire community of right-wing fucktards, then you would be correct.

:banghead:

"Fuckin' Duh!!"

Greenspan is without challenge the most talentless toad to ever serve as Federal Reserve Chairman. He pissed on the economy -- hiking interest rates because of the bogeyman of "wage inflation" but let stock prices go nuclear. After a decade of scolding Congress on deficits, he endorses Bush's tax cut in 2001, and then goes back to scolding Congress on deficits after the budget implodes.

Complete. Utter. Fucking. Idiot.

And now he thinks that a recession is likely. No Shit, Sherlock!

other "experts" were stating that the chance of a recession was low, maybe 10-15%.

folks, it's going to be bad. each and everyday, someone comes out and ratchets up the estimates.

They know what's coming. If they actually told the truth, the economy would collapse because everyone would stop spending altogether and save.

And you know, the repukes can't have that happen.

They are trying to squeeze the last few cents out of our wallets before the shit hits the fan.

What the hell does he think this country is going through right now? Food costs through the roof. Energy costs through the roof. EVERYTHING through the roof except for working peoples wages.

Oops, gotta watch the blood pressure.

:eyes: