Former Federal Reserve Chairman Alan Greenspan, speaking later on the same program, said strengthening confidence in the economy could be dashed if home prices were to take another turn downward. Greenspan told the ABC program he didn't believe that a steep drop was in store, but home prices had stabilized only temporarily. "It is possible that could get a second wave down," Greenspan said. "Under those conditions, we would get a very significant change in the underlying confidence in the consumer area," as foreclosures rise and more home values fall below their mortgage levels. http://www.reuters.com/article/marketsNews/idUSN0248059020090802 Also more goodies ... Geitner sayin more stimulus for welfare checks and tax raises coming soon to pay for it. I didn't watch this show, I should have. Sounds like I missed a lot of fun.
Greenspan testified during the bubble that there was not a bubble. Let the old geezer go live out his retirement and leave us alone. He should just fade away. I think his credibility is shot. Do I think there's "the possibility of" another wave down? Of course the "possibility" exists. Will there be? Ask me in 5 years. Some say this recession is eerily similar to the recession which preceeded the Great Depression. I agree with that, with the difference being the corrupt bailouts of AIG, BS, GS, etc. (If you don't think GS was bailed out, then look who was on the other side of the AIG $185B bailout). Going into the Great Depression, the banks which survived were the ones in farming communities which did not foreclose. They simply told the farmers and others "Hold onto your land. We know you can't make previously agreed payments. When you make some money then you give us some money and when this thing is over we work it out." What this did was keep 100% of loan value on the books of the banks and hence they survived. So all those banks with high foreclosures today get what they deserve for not using common sense. They take something they have $200k in paper on and spend $15k to foreclose and dump it into the market for $50k. I don't have a Ph.D. in economics, but when you turn $200k into $35k I think maybe, just maybe, your business plan won't survive. In banking if they spelled the word bonus J O B then they would be doing better. Here's how it works. "Hey Joe Blow: You were a tremendous benefit to our company last year. Because of that, we are offering you your job for another year. All those people who did not do a tremendous job last year get to live on $200 per week unemployment. And if you do a tremendous job this year, we will likely offer you yet another year of employment" I know people who work for one of the largest money center banks in America. They are told continually they have to have "sales" yet they are telllers, etc. By sales it means credit cards, etc. They are supposed to convince their regular customers they need more credit cards (yes, today) "in case the water heater goes out because you never know when it's going to happen..." Even 90 year old people with hundreds of thousands of dollars cash in the bank are pushed for credit cards and other products. A neighbor of mine goes into the same bank to roll over credit cards onto this bank's teaser rate. They convince this woman to instead apply for $100k in a personal line of credit. The line of credit was not approved and she got pissed at the bank and said screw you on the $1.2MM note on her house. This weekend she's moving out. She just bought a nice place on South Beach for half of what she owes on the one the bank is holding paper on. BANKS ARE STUCK ON STUPID TODAY. Let the stupid banks fail today and we will end up with better banks, and a better economy, tomorrow. Enough of my babbling on banking.