Greenspan: ‘We are on the brink’ of a recession.
By on Jun 24th, 2008 at 2:34 pm
Greenspan: ‘We are on the brink’ of a recession.
Former Federal Reserve Chairman Alan Greenspan warned today that “the U.S. economy was ‘on the brink‘ of a recession, with the chances of that happening at more than 50 percent.” Greenspan added that a quick recovery of the sour economy is unlikely. “A rebound at this stage is not something I think is in the immediate outlook,” he said. “There are still very considerable structural problems remaining in the financial system. They will remain for a while. It’s going to be very difficult.”
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Just as we are ‘on the brink’ of 2008
June 24th, 2008 at 2:36 pmYeah. Thanks for all your “help” with that, Greenspan.
June 24th, 2008 at 2:37 pmJeebos h. crap on a crutch…More proof we need younger mind’s running this country…Give the ass a bottle of gerital and send him on his way….Blessings
June 24th, 2008 at 2:38 pmGreenspan added that a quick recovery of the sour economy is unlikely. “A rebound at this stage is not something I think is in the immediate outlook,” he said.
Especially if anyone votes GOP for any office ………..
June 24th, 2008 at 2:40 pmYou’ve got to wonder what Greenspan’s motivation for speaking about recession now is. Fear of regulation? or some other form of Federal intervention? He’s usually more arcane and doesn’t use the R word at all. He’s usually the “inflation” guy. So, what’s really up?
June 24th, 2008 at 2:46 pmIt took Bush 8 years to destroy 3 countries, only 8 years.
But really the destruction began with RayGun and the repukian scum politicians and the repukian scum that voted against their own good.
A nation of retards….well at least the 51million who voted for the war criminals.
June 24th, 2008 at 2:46 pmReminds me of the old adage about the difference between a recession and a depression:
A recession is when you are out of work…A depression is when I am out of work.
June 24th, 2008 at 2:47 pmNot to say what Greenspan himself is on the brink of, but I wouldn’t be surprised if a lot of Andrea Mitchell’s near future was devoted to wiping things off his chin . . .
June 24th, 2008 at 2:48 pmprecipice is such a better word for it
June 24th, 2008 at 2:49 pmGDumbya is hoping that he can hang on for another quarter. Then, if the recession starts after the election, he thinks that he’ll be able to call it the “Obama recession”.
June 24th, 2008 at 2:50 pmYes, after the bow is completely submerged, we still have those who claim that the Titanic is “on the brink” of sinking.
Our economic experts (past and present) are still arguing over semantics and quibbling over the definition of “recession”. Meanwhile, the American public is experiencing unprecedented gas prices, higher food bills as a result, more unemployment, less health care insurance, home foreclosures, and other challenges to just plain making ends meet. When the pain level has gotten this high, does it really matter what you call it?
June 24th, 2008 at 2:52 pmIt will become a “recession” the day after Obama is sworn in.
June 24th, 2008 at 2:53 pmJust wait til gas gets to $6 and then $7 a gallon. You think we got issues now? It’s going to get very bad, very qickly. Grow your own food, if you can. We will start to see shortages of things which require lengthy transporation (fruits and veggies, mostly). Next the infrastructure will continue to crumble as our gas tax revenues diminish. There will be a domino effect which will be frightening to watch.
In the next 30-50 years, the United States will be governed by another country, probably China.
June 24th, 2008 at 2:53 pmYa think? Anyway, the federal reserve is just one arm the international banking cartel that hasbeen working for decades to establish a true global government. Paranoid you say?
June 24th, 2008 at 2:54 pmYou’re not paranoid if people really are out to get you…
Doesn’t anyone else question that Greenspan only NOW thinks we are on the brink ? Usually people with economic background can foresee further than two or three months. Greenspan’s position was to oversee banking methods, watching all economic factors but NOW he feels we are sinking.
June 24th, 2008 at 2:56 pmGreenspan used to be pretty sharp. How come its taken him this long to discover that water is wet ?
June 24th, 2008 at 2:57 pmJesus Christ! Ohio has been in a recession for a couple of years now. We don’t need someone to tell us what we all ready know! They think we are stupid! Good God all mighty!
What’s your solution Mr. Greenspan?
June 24th, 2008 at 2:58 pmhttp://www.youtube.com/watch?v=_dmPchuXIXQ
http://www.youtube.com/watch?v=lBZne09Gf5A
http://www.youtube.com/watch?v=SjUrib_Gh0Y
http://www.youtube.com/watch?v=_BVNN1wqw3k
http://www.youtube.com/watch?v=VPPFgHF9VR4
June 24th, 2008 at 2:59 pmIf he is so prescient, why did the “maestro” preside over two US recessions as Fed Chair?
June 24th, 2008 at 3:00 pmGreenspan: ‘We are on the brink’ of a recession.
And it’s all Clinton’s fault , right GOP ?
June 24th, 2008 at 3:01 pmBrink?
June 24th, 2008 at 3:13 pmWe already fell off that cliff.
Try brink of Depression.
Greenspan is getting very slow in his old age.
Greedspan, you’re a genius. No wonder our nation hangs on your every word.
June 24th, 2008 at 3:15 pmI think he’s talking about the ‘Big D’, & I don’t mean Dallas.
June 24th, 2008 at 3:15 pmOne thing I can agree with Harry Reid on – “I think he’s [Alan Greenspan] one of the biggest political hacks we have in Washington.”
June 24th, 2008 at 3:19 pmThat dick is on the brink of a recession.
June 24th, 2008 at 3:20 pmThe housing boom was caused by the Federal Reserve’s policy resulting in artificially low interest rates. Consumers, misled by low interest rates, were looking to consume, while homebuilders saw the low interest rates as a signal to build, and build they did. The larger the bubble, the more malinvestment would occur, and the more severe the correction would have to be.
Greenspan understood and could have predicted all of the events he was putting into motion by inflating a massive housing bubble – look no further than his doctoral thesis for New York University, compiled and written in 1977.
Greenspan noted that homeowners were refinancing for larger amounts than their original mortgage, in essence monetizing increases in their home’s market value and spending the excess cash on goods and services or putting it into savings. This was long before double-digit rises is home values, subprime mortgages, no-doc loans, Home Equity Lines of Credit (HELOCs), and inflatable-value McMansion-burbs, but is a perfect representation of what happened during the real estate boom of the late 1990’s and early 2000’s.
Greenspan believed that a continual cycle of rising home prices and refinancing could not continue, however. As Greenspan himself claimed in his doctoral thesis, “There is no perpetual motion machine which generates an ever-rising path for the prices of homes.” He also knew the more inflated the bubble became, and the more capital was misdirected into it, the greater would be its fall.
Who, though, could have predicted such a large crash of the real estate market, with property values falling to lower than the replacement costs of the buildings? Well, Greenspan, for one. A “break in prices of existing homes would pull down the prices of new homes to the level of construction costs or below, inducing a sharp contraction in building,” he wrote in the thesis that earned him a well-deserved Ph.D; well-deserved due to his uncanny ability to predict the consequences of policies he would set in place and disclaim responsibility for later on.
Most joking aside, the example of Alan Greenspan as Federal Reserve chairman should serve as a strong warning against putting anyone in power who believes they understand how the economy works. Greenspan understood and believed in libertarian ideas of economic manipulation and Austrian economics, and then spent nearly two decades at the Fed working against every one of those principles.
It is not so much that he went back or overturned what he believed in to become the most successful bubble-inflator in history — far worse than that, he used his understanding of how a free market can work in order to further the cause of socialism. In fact, it would probably have been far less destructive to have someone in charge of the Fed who had admittedly no understanding of how markets work at all, rather than someone who understands free markets and the prosperity they help engender but psychopathically worked in the opposite direction.
June 24th, 2008 at 3:20 pmGreenspan would know all about the “structural” problems of the economy-since he built them!
June 24th, 2008 at 3:22 pmGreenspan should stfu, and STAY retired.
Alan Greenspan endorsed the regressive Bush tax cuts of 2001 that pumped up the federal deficits and aggravated inequalities.
Alan Greenspan caused the housing bubble that is now in collapse.
Alan Greenspan ignored the stock market bubble that subsequently cost investors $6 trillion.
Alan Greenspan endorses John McScrewYou
June 24th, 2008 at 3:23 pmWe can avoid the recession if we just build the pie higher. Yummy pie in the sky!
June 24th, 2008 at 3:25 pm…On the brink??????????!!!!! It is a ressecion! Made in america by War Criminals!
June 24th, 2008 at 3:26 pmIf Bush (first one or second one) hires a person – you can bet they are not good for the country, only the GOP. That is the first history lesson the future should heed. The second lesson is to ignore the advice of the ‘expert’ which brought you to this brink. Greenspan fooled around for how many years, before doing anything? Hmmm, looks like another right side trashing of our country.
June 24th, 2008 at 3:27 pmWelcome & thank you, johnfive.
I’m no economist, and I really appreciate the background on Greenspan…excellent post.
June 24th, 2008 at 3:27 pmReminder that a recession is two or more negative quarters of growth in a row. No recession here, “Brink” comments or not. For those of you old enough to recognize the pattern, the word recession reappears practically every time there’s a presidential election.
June 24th, 2008 at 3:27 pmHussein McCain Says:
We can avoid the recession if we just build the pie higher. Yummy pie in the sky!
I like pie; Custard Pie!
June 24th, 2008 at 3:27 pmYeah, he would know…Him and his boys are the reason.
June 24th, 2008 at 3:32 pmGee, Alan, ya think?
June 24th, 2008 at 3:32 pmI agree, JohnFive. thanks for this excellent post!
June 24th, 2008 at 3:33 pmI’d like to add my thanks for your post, johnfive.
June 24th, 2008 at 3:38 pmNEW YORK (CNNMoney.com) — “The latest hit to the economy could come from state houses and city halls across the nation, which are in their worst budget crisis in years.
The American Federation of State, County and Municipal Employees, a public employees union, says about 45,000 government layoffs have been announced this year.”
The unemployment rate jumped by half a percentage point in May, with 8.5 million people out of work last month. The jump from 5 to 5.5 percent is the largest monthly increase since February of 1986.
June 24th, 2008 at 3:41 pm“The U.S. economy lost nearly 50,000 jobs last month; May was the fifth straight month in a row in which the job market has shrunk.
The last time the U.S. job market shrank for five consecutive months was in 2001 and 2002, when the nation was in recession.”
Quick! Attack someone!
June 24th, 2008 at 3:41 pmSince Greenspun is the one who created the mess to begin with, it sort of begs the question about why he’s saying it now. Seems like he’s trying to pre-empt the news so that he can remain ‘relevant.’ Except…it’s old news. We already know this, Alan, now go back to sleep after Andrea puts the bib back under your chin.
June 24th, 2008 at 3:41 pmSorry, my bad. The recession is my fault — I haven’t spent my stimulus check yet.
June 24th, 2008 at 3:42 pmIf anyone is interested, here’s a excellent dissection of the housing crisis…
http://www.thislife.org/Radio_Episode.aspx?sched=1242
June 24th, 2008 at 3:43 pm#27 – Yes, eleven interest rate cuts in 2001. And they continued to be cut, up to the present. The result was an overheated housing market, among others. We all know what these low interest rates did and the abuses they led to. We also have experienced an increasing decline in the value of the dollar. The U.S. dollar declined 80% against the Euro 2001-2008.
June 24th, 2008 at 3:45 pmMr.NiceGuy Says:
Reminder that a recession is two or more negative quarters of growth in a row. No recession here, “Brink” comments or not. For those of you old enough to recognize the pattern, the word recession reappears practically every time there’s a presidential election.
The only thing that is keeping our GDP from having negative quarters are the record profits of oil companies.
June 24th, 2008 at 3:50 pmrogerse Says:
impeachcheneythenbush Says:
well, it was either recession then, or now…
Yes it was a shallow recession then; this is far more serious and is impacting the entire economy. And not just in the U.S. We aren’t on the “verge of a recession.” We are IN a recession and heading toward a depression. But I guess until you are personally affected in some way (which evidently you aren’t hurting yet), you will continue to deny that we are in serious trouble. And when that time comes, and it will, you will then turn around and blame the Democrats for it.
June 24th, 2008 at 4:11 pmMr.NiceGuy Says:
Reminder that a recession is two or more negative quarters of growth in a row. No recession here, “Brink” comments or not. For those of you old enough to recognize the pattern, the word recession reappears practically every time there’s a presidential election.
June 24th, 2008 at 3:27 pm
If you’d read misshusseinmolly’s post at #11, you wouldn’t have been inclined to give us the glossary definition of a recession.
If, let’s say, the only economic pain were job losses, your reminder that the economic downturn hasn’t met the textbook definition of a recession would carry greater weight. But this economic pain is greater than the sum of its parts. This is not a balance-sheet recession.
I take it that you’re doing well despite this economic downturn and, for that reason, you are downplaying the trouble of others at the receiving end. The stark difference is that progressives, regardless of whether they’re absorbing the higher costs and personally dealing with job losses, care enough to document that others are not so fortunate and that there is real suffering out there.
June 24th, 2008 at 4:26 pmI am doing well, thankfully, although that has nothing to do with Bush, Clinton, Bush,Reagan, or Carter, but rather it has to do with my own rugged individualism and desire to achieve. I don’t expect the government to “handle” the ecomony. I expect the economy to handle itself. Generally when the govt. involves itself with the economy, it just gets worse.
June 24th, 2008 at 4:49 pmYes we likely won’t agree here although I must say that if you think there is “real suffering out there” regarding suffering from the current US economy, I have to remind you that those having only limited cable channels, older cell phones, or a late model car is not my idea of suffering. I’ve seen true suffering in other countries, and I assume you have too. The US has perhaps the richest poor people in the world. A 95% employment rate is pretty exceptional already, and I don’t think that we can expect the government to provide jobs, houses, med care, food, etc, etc, etc, etc, etc, to everyone. Recession indeed. Seems to me that if you want to retrain yourself, there are ample opportunities to do this. If you have no skills, then you’ll never be employed. Btw, I do give money to charity, so I am not indifferent to suffering. I just don’t happen to think that the economic sky is falling.
John Kerry Says
June 24th, 2008 at 4:39 pm
If anything is GOOD for America, it’s BAD for libs!
If anything is BAD for America, it’s FANTASTIC for libs!!
This says it all. It’s f’n sick but so damned true!!
Hate to tell you libs but there is NO recession. This HAS to upset you!
______________________________________________
Geez — are you having a bad day or something?
When you calm down and decide to be rational, you might provide some backup for your accusations. At the very least, point out some of the unmitigated glee and random happy dances we are all doing here because our economy is in the toilet.
I realize that for you, it’s all about “winning”. Party before country. Therefore, you couldn’t possibly realize that for most of us, it’s more about doing what’s best for our country than being able to hold up our giant foam fingers in November, chanting “We’re numbah one!” If I knew that voting for a Republican candidate for president was the only way to ensure that our health care delivery system would get fixed, that we would regain a healthy middle class, that our children would get educated, that we’d bring our troops home and not start any more wars for oil, that our veterans would be take care of, that our environment would be protected, and that Americans’ rights would be preserved, I wouldn’t hesitate to make my mark next to the (R) on my ballot. Your projection about us wishing disaster just to give our side some kind of advantage in the election is as sick as people who wish for another 9/11 attack just to gain a few more votes for their side — it’s just plain sick.
And lastly — you can call it a recession or not call it a recession. It doesn’t really matter. What matters is that we have a lot of people who are struggling to make ends meet because of soaring gas prices, food prices, health insurance prices (and availability), an imploding home market, and higher unemployment. They’re having a hard time. Do you think they really care about vocabulary?
June 24th, 2008 at 5:05 pmon the “brink”,huh….
June 24th, 2008 at 7:04 pmI guess the wealthy are starting to feel the pinch now.
Thanks for the update Alladin GreenPants!!!
Now. Just…Go…Away!!! ‘K?
June 24th, 2008 at 7:14 pmThe ONLY thing that could possibly avert a recession is the immediate and complete closure of the “Enron loophole.”
Some economists believe that within thirty days the price of a gallon of gasoline in the U.S. would drop by a dollar or even two, immediately reducing inflationary pressure, dropping energy costs across the board and even lowering food prices.
Plus, since some of the right-wing terrorists are no doubt taking advantage of the “Enron loophole,” playing the unregulated oil futures markets overseas, probably through front men or front companies, then completely closing the “Enron loophole” would potentially cut off anymore money from this source making it into their terrorist fund. (Or at least, through regulation and oversight, we’d know if they had been doing this).
And Barack Obama is the ONLY candidate whom I’ve heard who is for the complete closure of the “Enron loophole,” which means he’s the ONLY candidate interested in cutting off any potential funds from oil futures speculation in overseas, unregulated on-line futures markets getting into the hands of right-wing religious fundamentalist terrorists, wherever they might be.
June 25th, 2008 at 12:02 am