Tuesday, February 27, 2007

Greenspan helps out his pal Bernanke

The media is pointing to comments Alan Greenspan made recently as a factor in today's market drops. The AP says that

"Investors were also spooked by comments Monday from former Federal Reserve Chairman Alan Greenspan, who said a recession in the U.S. was "possible" later this year."

Also, "In comments to a business conference in Hong Kong on Monday, Greenspan said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end."When you get this far away from a recession, invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle.""While, yes, it is possible we can get a recession in the latter months of 2007, most forecasters are not making that judgment and indeed are projecting forward into 2008 ... with some slowdown," he said."

Greenspan can say this without repercussion since he is retired; he's helping Bernanke out by stating the facts where Bernanke couldn't say the same thing without serious repercussions.

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