Greenspan: This Is The Worst Economy I've Ever Seen

[one...two...tree 2,762]

Former Federal Reserve Chairman Alan Greenspan offered a woeful outlook of America's economic situation on Sunday, saying the crisis with the country's financial institutions was as dire as he had ever seen in his long career, and predicting that one or more of those institutions would likely collapse in the near future.

"Oh, by far," Greenspan said, when asked if the situation was the worst he had seen in his career. "There's no question that this is in the process of outstripping anything I've seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system."

....

Much of the issue, Greenspan added, was the trouble in the housing market, which he predicted would become stabilized by next year. Pressed by host George Stephanopoulos as to whether another major financial institution -- such as the struggling Washington Mutual, American International Group, or Merrill Lynch -- would fail in the interim, the former Fed chair responded in the affirmative.

"I suspect we will [see one fail]," he said, "but in and of itself that does not need to be a problem. It depends on how it's handled and how the liquidations take place. And, indeed, we shouldn't try to protect every single institution. the ordinary cost of financial change has winners and losers."

In light of these dynamics, Greenspan noted that the government was left with tough decisions: which institutions are "so fundamental to the functioning" of society that they demanded a federal safety net? Earlier in the week, the former fed chairman noted that such choses extended to tax policy as well. In an interview with Bloomberg Television, Greenspan argued that the country couldn't afford the tax cuts being proposed by John McCain without an equally massive reduction in spending.

"I'm not in favor of financing tax cuts with borrowed money," he said. "I always have tied tax cuts to spending."

http://www.huffingtonpost.com/2008/09/14/g...r_n_126274.html

[dalegg 143]

big Hurricanes, collapsing economy. Those Mayans aren't looking so crazy now are they?

[one...two...tree 2,762]

big Hurricanes, collapsing economy. Those Mayans aren't looking so crazy now are they?

This isn't the time to blame it on Prophecy. We need some rational and honest re-thinking with regard to regulations and oversight of the markets. This is really getting scary no matter which candidate or Party one is supporting....we cannot stay on this economic course that the Bush Administration has us on.

[IAMX 3,055]

big Hurricanes, collapsing economy. Those Mayans aren't looking so crazy now are they?

Just the people who connect this to the Mayans.

[symbiosis 0]

Have to agree with Jabberwocky. What we don't need is someone who believes in Bible prophesy, either.

[Ban Hammer 13,352]

big Hurricanes, collapsing economy. Those Mayans aren't looking so crazy now are they?

This isn't the time to blame it on Prophecy. We need some rational and honest re-thinking with regard to regulations and oversight of the markets. This is really getting scary no matter which candidate or Party one is supporting....we cannot stay on this economic course that the Bush Administration has us on.

interesting how the democratic controlled congress does not enter your field of view......

[symbiosis 0]

Curious how you won't acknowledge that the trillion dollars spent on a useless war limits the government's ability to correct the situation ...

not to mention that the rest of the world has no confidence in our liquidity as a result.

the president ALWAYS owns the economy. After 8 years, he owns it lock, stock and barrel.

[one...two...tree 2,762]

big Hurricanes, collapsing economy. Those Mayans aren't looking so crazy now are they?

This isn't the time to blame it on Prophecy. We need some rational and honest re-thinking with regard to regulations and oversight of the markets. This is really getting scary no matter which candidate or Party one is supporting....we cannot stay on this economic course that the Bush Administration has us on.

interesting how the democratic controlled congress does not enter your field of view......

Charles, if you want the nitty gritty details of why how the subprime loans came into existence and how so many of these financial institutions are falling like cards, I'll post it here. I thought most people understood just where the problems exist - deregulation and lack of oversight. Many people have forgotten about the S&L fallout due to deregulation back in the Reagan years. It's like having NFL kicking out its referees and promising the fans that only a team that's free to play the game it wants can truly excel.

[AlHayatZween 2]

i read a quote in one of the small a.m. dailies, i don't remember the persons name, and i already threw out the paper.

But one analyst said something along the lines of: If we don't get ahead of this thing [the financial crisis], we could see a run on the big commercial banks before election day.

It's pretty scary out there. But what's even scarier, is that neither of the presidential candidates seem to have much to say about it, other than pointing the finger to someone else... Neither one of them seem to have a strong plan, now that the situation has worsened....

Does anyone else feel uncomfortable about this?

Surely they are supposed to surround themselves with good people, great thinkers, economists, analysts, policy experts, to make up for the areas they might be lacking in... So... how come no bright ideas are emerging?

hz

[Trumplestiltskin 5,791]

Curious how you won't acknowledge that the trillion dollars spent on a useless war limits the government's ability to correct the situation ...

not to mention that the rest of the world has no confidence in our liquidity as a result.

the president ALWAYS owns the economy. After 8 years, he owns it lock, stock and barrel.

Certainly this is true when the President's party also held the congressional majority for 3/4 of Bush's time in office.

[w¡n9Nµ7 §£@¥€r 123]

True or not, Greenspan needs to STFU. Maybe he has another book to sell? Why else would he be trying to talk down an already scared sh1tless market?

[SMOKE 1,426]

Curious how you won't acknowledge that the trillion dollars spent on a useless war limits the government's ability to correct the situation ...

not to mention that the rest of the world has no confidence in our liquidity as a result.

the president ALWAYS owns the economy. After 8 years, he owns it lock, stock and barrel.

Certainly this is true when the President's party also held the congressional majority for 3/4 of Bush's time in office.

if you wanna blame a particular party feel free to do so. but, i remember a group of clowns (dems) saying 'we're going to fix the economy' 'rah rah rah' & after they took control of the house & senate all they did was stand on a stage w/ their hands clinched together raised in victory. not a damn thing else. they did nothing to fix the economy. not a damn thing. now its Bush's fault the dems didn't keep their campaign promises...please.

True or not, Greenspan needs to STFU. Maybe he has another book to sell? Why else would he be trying to talk down an already scared sh1tless market?

bingo! STFU! + isn't he the one that kept intrest rates very low for a very long time.....actually helping to fuel the sub prime mortgage & economic chit storm we are faced w/ right now?

[w¡n9Nµ7 §£@¥€r 123]

isn't he the one that kept intrest rates very low for a very long time.....actually helping to fuel the sub prime mortgage & economic chit storm we are faced w/ right now?

He is more responsible for this mess than Bush is IMHO.

[kaydee457 13]

True or not, Greenspan needs to STFU. Maybe he has another book to sell? Why else would he be trying to talk down an already scared sh1tless market?

I fcuking agree! This dope needs to keep his mouth shut......I've been saying this for the past few months. Everytime he opens his mouth he adds to the hysteria in the markets.

BTW, isn't it ironic that the advice given most often to those with 401k's in these turbulent market times is to sit on your hands and do nothing whilst the "professionals" hysterically selloff on every tiny bit of bad news?

I'm -18% in the red as of today and probably will be in the 20's tomorrow after the impact of the Asian selloff today....It is indeed getting scary and it seems most of it is driven by blowhards like Greenspan.....

[w¡n9Nµ7 §£@¥€r 123]

BTW, isn't it ironic that the advice given most often to those with 401k's in these turbulent market times is to sit on your hands and do nothing whilst the "professionals" hysterically selloff on every tiny bit of bad news?

Well, I have a long time horizon - I don't intend to withdraw (or even borrow) from my 401k for at least 30 (more likely 35) more years. Doesn't it make sense for me to not panic at this point?