Sunday, April 06, 2008
Geez, is it ever going to stop? This story from Reuters contains about the 23rd in the excruciatingly long series of recession predictions from former Fed Chairman Alan Greenspan.
Proving that he does indeed possess the ability to forecast in real time (but not very well), the latest recession probability update comes in at better than 50-50 odds for a recession sometime in the future.
More than 50 percent chance of U.S. recessionYes, real estate bubbles all around the world ... not his fault ... a "savings glut" ... long-term interest rates beyond his control ... the fall of the Berlin Wall ...
By Sonya Dowsett Sun Apr 6, 6:15 AM ET
MADRID (Reuters) - There is more than a 50 percent chance the United States could go into recession, former Federal Reserve chairman Alan Greenspan told El Pais newspaper in an interview published on Sunday.
However, the U.S. has not yet entered recessionary state marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy, he said.
"We would have to see signs of this intensification: there are some, but not many yet," he said. "Therefore ... I would not describe the situation we are in as a recession, although the chances that we'll have one are more than 50 percent."
Turning to Europe, he pinpointed Spain as having a bigger real estate bubble than the United States, exposing it to the global credit squeeze.
"The real estate bubble in Spain has been bigger than most other European countries, even bigger than the one in the United States," he said. "In that sense, one would have to presume that there is more vulnerability."
This week's cartoon from The Economist: