Posted on 02/26/2007 6:13:36 AM PST by jdsteel
Bold text has been added by me
Alan Greenspan Warns That U.S. Economy May Slip Into Recession by End of Year
HONG KONG (AP) -- Former U.S. Federal Reserve Chairman Alan Greenspan warned Monday that the American economy might slip into recession by year's 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.
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. A survey released Monday by the National Association for Business Economics showed that experts predict economic growth of 2.7 percent this year, the slowest rate since a 1.6 percent rise in 2002.
Greenspan also warned that the U.S. budget deficit, which for 2006 fell to $247.7 billion, the lowest in four years, remains a concern.
"The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world," he said via satellite at the VeryGC Global Business Insights 2007 Conference.
Greenspan also said he has seen no economic spillover effects from the slowdown in the U.S. housing market.
"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.
Yes, an amazing disconnect between the headline and the article. However, reporters don't necessarily write their own headlines. Editors do. Even special headline writers.
The content is certainly a heck of a long way from that headline, isn't it?
A recession that happens after so many years of expansion with a major housing slowdown and a big increase in oil prices is not unexpected. The Fed has been complaining about inflation and too much economic growth so this would be in line with their expectations as well.
He should STFU.
jdsteel-
Thanks for hitting the refresh button so that the accurate text is now available for us to read.
Having had to clean up after a bit of a party with friends last night, and shovelling heavy, wet snow this am here in Plymouth, MA, all the while thinking of the dems who turned especially traitorous over the weekend, I was a bit miserable.
But I'm glad for your read, and will be rotflmfao all day.
I don't know if it will be a full-blown recession, but I expect a tremendous slowdown. I have posted to a few other financial/investing threads that I am "cash-cautious" at the present time. I have not stored any dehydrated food, and stored water yet, but am leaving my options open to do so on short notice if a worse-than-I-expected situation presents itself.
There is always a recession ahead. It is part of the normal economic cycle. The only question is when.
A Dem congress will be a challenge for Bernake.
GWB is planning a recession in late 2008 in time to greet the new president in 2009. (/sarcasm for those of you who have no sense of humor)
Andrea not giving you enough hugs, Alan?
In case you dont' remember - you retired. Now, just get out.
I agree, he is in a tough position. I have NO doubt we are in for a fall, but the severity is the only thing I am not sure about. If we change course in 2008 and elect a Dim, I will be completely out of the market -- I am not saying forever, but it will spell disaster as our generation has never seen.
In other words, he has no idea. He can't "rule it out" because it would be "very precarious" to even make the forecase.
You're right, this is just more of the leftist media making up news to fit their agenda.
Expansion? What expansion?
Funny ... the first mention by the MSM of the economy expanding is 2007, six years into the expansion, in an article about how the expansion will lead to a recession eventually.
Eventually, you will be right. As others have said, it's not if, it's when and how bad that are the questions. I am betting on a good market for at least the next two years because with gridlock and a 2 year campaign cycle for POTUS there won't be much meddling from Washington. Expansion cycles have been pretty long in the modern era compared to the historical average, so I think 8-10 years on this cycle is very possible. After that only GOD knows!
As long as we have a central bank there will be boom and bust cycles.
Michael Crighton says that forcasts for GOREbull warming remediation are $600 trillion. When you have people trying to reinvent the economy based on trading something worthless like C02, you are talking fantasy. But hey, they brought us the dot.com bubble and they all live on big estates, now. It's only fair.
"A recession that happens after so many years of expansion with a major housing slowdown and a big increase in oil prices is not unexpected."
It shouldn't be unexpected to him since he would be the cause of it....absolutely horrible monitary policy.
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