Greenspan: Economy to Improve Despite Housing Slump

Discussion in 'Wall St. News' started by S2007S, Nov 6, 2006.

  1. S2007S


    "economy appears poised for a rebound"

    every talking head on cnbc says the economy is and has been doing great, what rebound is greenspan talking about???

    Greenspan: Economy to Improve Despite Housing Slump

    By Nell Henderson
    Washington Post Staff Writer
    Monday, November 6, 2006; 3:26 PM

    Former Federal Reserve Chairman Alan Greenspan said today that home sales and prices may continue to slide for some time, but the broader U.S. economy appears poised for a rebound.

    "It looks as though the worst is behind us" in terms of the effect of the housing slump on economic growth, the retired Fed chief told financial advisers at a conference in Washington organized by a division of Charles Schwab & Co.

    Profile of the Nominee
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    Alan Greenspan's Tenure
    In 1987, Alan Greenspan was sworn in as Chairman of the Federal Reserve. Look back at his more than 18-year career through four presidencies with analysis of his legacy, a compilation of stories about his tenure and archived photographs.

    "We're obviously going through a significant slowing period, which as best as I can judge is quite likely to be temporary," said Greenspan, who retired in January after more than 18 years leading the world's most influential central bank, and whose words are still closely monitored in financial markets.

    U.S. economic growth slowed sharply to a sluggish 1.6 percent annual rate in the July through September quarter, largely because of a 17.4 percent drop in spending on home construction. Home sales and prices have also fallen recently in many markets.

    Greenspan, now a private consultant working on a memoir, said the housing downturn has "a way to go" before it hits bottom, but its effect on the rest of the economy should abate in the months ahead.

    Other U.S. industries are enjoying healthy profits, consumer spending has remained solid, and "the global economy is in extremely good shape," he said. "Things don't look bad."

    Many analysts expect the economy to pick up steam in the last three months of the year. Macroeconomic Advisers LLC, a St. Louis forecasting firm, for example, projects economic growth rebounding to a healthy 2.8 percent annual rate in the final quarter. That is close to many estimates of the economy's "potential" growth rate, or the fastest it can expand without fanning inflation.

    Greenspan made his comments during an hour-long question-and-answer session. He delivered no prepared remarks and said nothing about current Fed policy.

    During his last year as Fed chairman, he had said he did not see a national housing bubble, but rather some "froth" in some markets. Today, however, he attributed much of the recent housing boom to a "speculative surge" caused by global financial conditions that pushed mortgage rates down to very low levels until the last year.

    Greenspan said he could not predict when home sales will start rising again, or when home prices will stabilize. But he said of prices, "it's hard for me to believe that they can stabilize at the level they are now because we had too much of a speculative surge. We have to lose some of that."
  2. It is interesting to see how the Master Bubble thinks about the bubble that he helped to created in the first place.
  3. i think its really counterproductive for this guy to be yapping all the time... he had his time...should shut his pie hole. i thought he was going back to israel...
  4. Danulous


    every talking head did not say the economy was doing great. they say the market is doing great while the economy has slowed.
  5. Rebound or recession?