Greenspan Sees A Recession Looming

[ECW]

ormer U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year-end.
He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.

"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

~link~ (http://www.cio-today.com/story.xhtml?story_id=12200B9NF6FM)

With the housing market going soft and wages stagnant while our manufacturing base heading off to China, I can say that I saw this coming. The recovery from the first Bush recession which cost us over 3 million jobs was never that good and now we are headed back downward again.

[BoogyMan]

Only ECW could take a completely non-partisan assessment and twist it to try and create an attack the president thread.

[firefox]

He's right, though. End the regulation for Christ sake! Many workers are angry, but few recognize the cause of their job loss, which is very much tied to a lack of competitive advantage, amplified by regulation. I would wager that even in a totally free market the US is "beyond" old-school heavy industry, but the transition would have been much more gradual and less painful.

ECW, don't you love how people like Greenspan always decry these problems, but ONLY after they have safely left their positions and secured their booty? Where were they before?

[ECW]

ECW, don't you love how people like Greenspan always decry these problems, but ONLY after they have safely left their positions and secured their booty? Where were they before?

They were there, parroting the party line, like a good Republican should. Some get a conscience when they move out of the privilged inner circle but not many.

Only ECW could take a completely non-partisan assessment and twist it to try and create an attack the president thread.

Maybe I am the only one who understands that this president has done everything he can to help out his rich buddies while the middle class and the poor have fallen further and further behind where they were six years ago. Every program this president proposes economically benefits the wealthy in hopes that some of that largell will trickle down to the lower classes. It never does but that is the Harvard educated president's theory. A downturn in the economy will just put further pressure upon average Americans and we won't hear one innovative idea to help out anyone other than the richest 1% he has already helped out with his budget busting, debt creating tax cuts. He may have an MBA but he certainly hasn't shown any tendency to use it for good.

Maybe I am the only one that refuses to argue the theoreticals and, instead, prefers to look at what this actually means for the everyday American. It doesn't look good and we have a president who thinks otherwise. His future's so bright he has to wear shades but the rest of us have to deal with the glare of reality.

[firefox]

ECW, I think you are completely right, except for one thing. Democrats are just as guilty of this kind of pandering at the expense of the general welfare. I think anyone would do something similar with that kind of power, either out of "necessity" to maintain that power, or because crooks tend to be the ones most interested in using/abusing others for their own benefit. I say, tax cuts for everyone!

If Bush & Co. were *really* interested in promoting fairness and improving the economy, they would give everyone a large tax break.* On the "supply side", lower taxes would encourage businesses to innovate more and expand, thus providing more jobs and lowering per-unit costs through economies of scale. On the "demand side", lower taxes leave more money in the hands of employees and consumers to buy goods and services, as well as save or invest themselves.

This one-sided plan is not only bad economic sense, but it also enhances the gap between rich and poor by making it harder for the middle and working classes to become economically empowered. He who has savings and the ability to invest calls the shots; He who is in debt may very well GET shot, at least in the pocket-book. Wouldn't you agree?

*...Accompanied by an equal, if not larger decline in spending, obviously. The problem here is the Federal Reserve, which allows Congress to tax everyone indirectly through inflation. This is how much of the military and social welfare expenditures are financed, especially when they go overboard in spending. "Regular" tax cuts are a good short-term solution, but the only way to *really* solve the problem once and for all is to eliminate centralized, fractional-reserve banking.

[speedracer]

Many workers are angry, but few recognize the cause of their job loss, which is very much tied to a lack of competitive advantage, amplified by regulation.

Which regulations? Be specific. I'm curious as to which ones exactly you believe are the root cause for our loss of a competitive advantage, and which countries are at an advantage because of a lack of regulation.

ECW, don't you love how people like Greenspan always decry these problems, but ONLY after they have safely left their positions and secured their booty? Where were they before?


That's exactly what I clicked on this thread to say. Good form.

Greenspan was a rotten coward for much of his last decade as Fed chair, and I don't say things like that lightly.

Frothy markets. :rolleyes: Blow me.

[firefox]

Regs: ALL of them are bad, but the worst are those that are not strictly health/enviro related, such as minimum wages, subsidies, the income tax, and various barriers to open international trade. Hong Kong, Estonia, and even Canada have more liberal laws when it comes to these issues when taken as a whole.

Greenspan: What do you think of Bernanke? I say, "here comes the new boss, same as the old boss".

[speedracer]

Regs: ALL of them are bad, but the worst are those that are not strictly health/enviro related, such as minimum wages, subsidies, the income tax, and various barriers to open international trade. Hong Kong, Estonia, and even Canada have more liberal laws when it comes to these issues when taken as a whole.

Give me some specifics. How would you change them? I'm trying to change the debate from one of generalities (in which I generally agree with you) to one of specific change. What exactly would you change in the regs, and what would be the benefits and drawbacks of the moves?

Greenspan: What do you think of Bernanke? I say, "here comes the new boss, same as the old boss".


Indeed.

[Labrocca]

So basically in 2001 (a year after Bush takes office and fixes all the Clinton mishaps) we see growth for 6+ years and the majority of his Presidency...and yet a coming recession which hasn't even happened yet! lol

wow...interesting take on some rather open words by Greenspan.

"While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said.

Do you have special reading glasses ECW that basically reverses statements?

Nowhere does Greenspan says a "recession is looming" btw. Your title is inaccurate to say the least. He says he can't rule it out and it's a possibility..that's all...a very open statement. He says clearly that we are so FAR AWAY from a recession that it's inevitable that a cyclical slowdown COULD occur. I can only read how strong this economy is and the fact that it's so damn strong that really the only place it can go is down...the question is just how far. Greenspan does not say at all that a recession is looming or inevitable ...only that it's possible since our growth has been so good.[hr]
With the housing market going soft and wages stagnant while our manufacturing base heading off to China, I can say that I saw this coming.


Oh and I love how you make that housing market assumption.

Greenspan also said he has seen no economic spillover effects from the slowdown in the U.S. housing market, and added that the global economy seems "benign and stable."

I guess you didn't read far enough into the article you quoted.

Here is another quote from the article on housing spoken by Greenspan.

"We are now well into the contraction period and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing," he said.

So I guess you picked and choosed which parts of the article to post that fit into your political agenda.

Also from that article:
The U.S. economy grew at a surprisingly strong 3.5 percent rate in the fourth quarter of 2006, up from a 2 percent rate in the third quarter.

So basically if a recession or slowdown does occur I can guarantee it will be bacause Dems have power and are increasing taxes.

[firefox]

More taxes definitely won't help the situation, that's for sure. I know, more dead weight will speed up the economy! That's it! 8-)

Speedracer: What "specifics" would you like to see? As I've stated already, the first step would be to get rid of federal/state min wage/max hours laws. I think this would be easier to achieve than income tax repeal, given that it means that the politicians and bureaucrats have "less to loose" in terms of revenue.

[jafar00]

Greenspan: What do you think of Bernanke? I say, "here comes the new boss, same as the old boss".


Bernanke started off ok, and came out with guns blazing, but once a few months of FED rot set in, he became a bit of a lame duck. In currency trading circles, nobody expects anything much from his speeches any more.

Greenspan is just letting off a bit of steam. In some aspects he is right, but mostly he is just generating a bit of publicity for his new book by coming out with some words that get everyone listening to him. ;)

[firefox]

Interesting. When all else fails, publish! More "don't worry, be happy" rhetoric I presume?