I thought Greenspan retired... Then why doesn't he keep his mouth shut!

Greenspan: Recession could be near
Now that former Federal Reserve Chairman Alan Greenspan has left office, he is freer to speak his mind about the state of the economy.

And so on Monday, he warned that a recession might be coming in the U.S. by year's end. It sent shudders through financial markets. He's sort of a King Kong when it comes to forecasting.

So he opens his mouth and this spills out...

"When you get this far away from a recession, invariably forces build up for the next recessions, and indeed we are beginning to se that sign," he said. Profit margins have stabilized, he said, and that's an early recession sign.

And then the next day this happens...

Stocks have worst day since 9/11 attacks
NEW YORK --Stocks had their worst day of trading since the Sept. 11, 2001, terrorist attacks Tuesday, hurtling the Dow Jones industrials down more than 400 points on a worldwide tide of concern that the U.S. and Chinese economies are stumbling and that share prices have become overinflated.

Still, traders' dwindling confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, just a day after former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.

Then the next day, Greenspan stays quiet and the Dow rebounds a bit. However, the following day Greenspans mouth opens again and this spills out...

Greenspan Says U.S. Recession Possible, Not Probable
March 1 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said a recession in the U.S. is possible, though not probable this year as excess inventory is being reduced quickly, according to people attending a CLSA Japan Forum in Tokyo today.

And, predictably, today the Dow drops again...

Dow falls another 200

I realize Greenspan, now that he is retired, has the same freedoms of speech that the rest of us do. But for a single person to be able to open his trap and consequently cause people to lose millions is almost criminal. Here's a suggestion Al... Shut the hell up and enjoy your retirement like most of us. Play some golf!

higher mate,

im afraid you are like many people in the west believing that a rumour like this can cause the sell off it certainly might help however its down to many factors

chinese vat or tax maybe rate rises the us is no longer the global superpower

house prices

higher fuel feeding through into inflation

and overvalued market anyhow

elf

I don't understand how it happens, but the dude is a jinx.

It's kind of like that John Madden. Everytime he starts talking about how wonderful a team is playing during Monday night football, the team starts going downhill. It got so bad I'd hear him say a player is doing well and I'm thinking "oh no, he's going to fumble" and sure enough, he does!

The two should hook up sometime. They have a lot in common.

I'd like to look at Mr. Greenspan's personal stock trades. Could you imagine the money he could make simply by opening his mouth and making "predictions" on the economy?

BTW: Does anyone know if and how he is affected by insider trading laws? Especially now that he's "retired"? For instance, since he's now just an average citizen, can he trade his stocks one day, say there's going to be a recession the next day, and then buy it all back the following day? Legally?

Hes not just an average citizen, he still holds his banking license (I believe) and brokers license so he is still in an authorised position. However even if he wasnt it does not matter an average joe in the street can be convicted of things if they buy or sell shares with knowledge through say a broker (I know the UK regulations well so I assume its very similair in the USA but dont quote me on it, im sure im right though)

Personally I believe he did every investor the best thing he could, the markets have been overpriced for a long while, the correction we are seeing is much better than if the market would have kept on rising then crashed as the housing stock, and similair figures come out soon.

everyone should realise that the housing market and low rates, with low inflation (due to cheap imorts) have fuelled massive spending in the usa, also credit offered to easy, keeping the markets in china and india high and prices low, this could not go on forever. Especially as the deficit and massive personal debt.

the war(s) america has embarked on have not been factored in as they should have been into the markets, you cant rely on bonds and gilts to pay for this now the oil has been stolen by cheney and co.

The inevitaable continued rise in oil and fuel took some time to be factored into inflation to include the same thing with the rise in rates.

It was coming better to fall onto a pillow with a shout than fall or jump from a window bankrupt.

Regards

Elf

I was thinking the same exact thing. He was probably short on something. LOL It's amazing how these cronies get away with this stuff.

Theres certainly no denying that the timing raises questions... however, one man's word cannot control the stock market like that. It certainly plays it's part, but I think his words were the final straw that broke the camels back. I too have seen a small recession coming for a while, I wasn't sure when, so I just dumped everything, and went straight into Forex instead to protect myself against economic crisis.

Speaking of which, I just made 200 dollars off of an trade against the US Dollar using the Japanese Y... I only started that trade 20 minutes ago... sweet, I'm going to the bar tonight!

Originally posted by MischeviousElf

Personally I believe he did every investor the best thing he could, the markets have been overpriced for a long while, the correction we are seeing is much better than if the market would have kept on rising then crashed as the housing stock, and similair figures come out soon.

True Elf...and the events in China only served to trigger the inevitable. Still, I'm wondering how the PPT (President's Plunge Protection Team) will respond to the crises.

Here's a quote from market analyst Dr. Martin Weiss today:

Any Wall Street analyst with half a brain should be starting to realize what I’ve been saying all along: There’s not a central bank or politician in the world that will sacrifice growth in the name of tighter money. If anything, this week’s downdraft will just spur them to print more money. These guys don’t want to see markets crash.


There's a chance that they'll go into full 'monetize mode'...rather than purge the excesses. It's easier to mask the resulting inflation via the Consumer Price Index, and other data sleight of hand, than it is to suffer the wrath a full market meltdown...and the majority of us 'little people' will never be able to figure out why we're suddenly paying more for goods and services.

Peace &
Good Fortune
OBE1


[edit on 1-3-2007 by OBE1]

[edit on 1-3-2007 by OBE1]

on the 26th of Feb
retired Mr Greenspan, forecast the possibility of an economic downturn or perhaps recession

in a cryptic, several layers removed wording, Alan G. put it out there that corporate profits would be the agent that would cause this stress in the economy....

a day after his speech was press published, there was turmoil; in the Chinese, Singapore, HongKong, markets, & by thurs & fri the USAs DOW
seen losses of 416 & swings of 100 points up & down....

On Sunday, Its announced that the FED and Central Banks
will cause the Sub-Prime lenders to cease & desist with EZ loans
exotic no-pay on Principal Loans & all these loose money wealth
transfers that's been making many shady dealers 'rich' & their
institutions 'bankrupt' (except on paper)
The crack-down starts Monday 5 March 2007, with new stringent loan guidelines to be enforced! it's expected that this action will shrink about 28% of the recent mortgage loan trade, & a 28% reduction in the many elements related to the housing, real-estate, building, finance, industries.

i sure didn't hear of the Fed chairman Bernake giving any heads-up
to anybody....even if Greenspans' warning was couched in cryptic wording, it was there & out in the open, just days before the Bankers & Fed
was going to reign in the sub-prime industry!
this could very well be the lead-in to the recession we were warned of...

watch the news on Monday 5 March 2007