Greenspan says US housing will get worse

Starting my day with a young punk taking a shot at Alan for being a "morale buster" brings me to the keyboard.

Remeber "irrational exhuberance"? This disease nearly sucked Wall Street into a run for DOW 14,000 last week, on the basis of an emergency rate cut because things are so bad.

Morale? Get real. Reality is charging at this economy right now -- OVERHEATED in many, many sectors and in CRISIS in others.

It is the formula for Stagflation if indeed another rate cut does get "baked into the cake."

Grow up, Wall Street!

Or find an elder who still has a good memory....

You ain't seen nothing yet! Any recession has nothing to do with Greenspans comments.

I am actually quite old. Probably much older than you are.

Doug McIntyre

Some people may recall that the last recession was first called the "Greenspan recession" as it was thought that he raised rates too much, too fast. As the dot.coms fell apart it became called the "Greenspan recession and the bursting of the bubble." Later it was just "the bursting of the bubble" and sometimes "the bursting of the bubble and recession." It was 1st felt unnecessary and then an unavoidable event. Perhaps Alan Greenspan was too important a figure to blame as 911 came and went and he appeared to ride to the market's rescue. But allowing him a form of "sainthood" can cause the public to misunderstand the current economic problems. In any case, it still appears that he had a lot to do with the 2001 recession by going too far and he did then flood the monetary system too much, too long after the 2004 election thus being partly responsible for the current turmoil. He is right about housing being in the dumps and threatening the larger economy. If you look at US economic history it does seem that we are in a period like the early 1970s in which the monetary system was flooded and which caused huge problems later. I'm not as negative on the US as Jim Rogers in his latest statements about the Fed rate cut (see Channeling Jim Rogers section- yellow label, top- at hiip://www.Barrelomoney.com) but there is room for concern- the US economy has been extremely resilient since the 1930s but some of the underpinnings seem to be weakening and an increasingly global economy is making things more complicated- perhaps increasing the chance of policy blunders.

Doug,

RE: Post 1. (above)

May 28, 1946

Greetings!

Thanks for the reply.

And I hope you take my comments in the spirit of: "the view from the other side".

Take care,

Roger

Correction: Barrelomoney URL is http://www.Barrelomoney.com.

My apology for the "repeat posting" above. A lazy mouse working through a KVM switch is haunting me today.

Why do financial reporters seem to always feel the need to be supportive of the bullish side -- even at times when being truely "neutral" in terms of impact (Simply telling the truth) can sound "Bearish"?

That's the essence of my point. Capital is the foundation of capitalism, and capital right now is disolving left, right and center as this so-called subpprime thing rolls its way through.

My career at the White House and State Department for Nixon, Ford and Reagan has brought my work in the field of international economics to a point where to these eyes it is obvious that BIG TROUBLE -- The "Mother of All Recessions" -- is headed our way.

Anything the Fed does now to placate the Street only shoves us further into the black hole of Stagflation.

TO: michael schneider

I am a data hound, Michael, and here's what I remember. Alan essentially "out-Volckered Paul Volcker by introducing something brand new to Wall Street, the "anticipatory rate increase." Note how close these dtaes are.

August 11, 1987 - Greenspan is sworn in as chairman of the Federal Reserve Board.

October 19, 1987 - The Black Monday decline was the second largest one-day percentage decline in stock market history.

To Roger:
I know this is going to sound crazy, but if you like data and cycles it would appear that we are due for an economic bump - large size. If one starts with the year 1740 and adds 35/40 years or so you come up with the revoultion period, 1816, 1857,1893, 1929, 1972 all of which were periods really poor economic expansion. There is nothing uniform as all the causes are different, but it happended. ??