Don't you just love the way Greenspan says one thing then quicjkly covers his message with an almost opposite view.

Bail out housing, Wall St., wage disparity, and prevent a recession. Demand that Congress and Bush immediately give America a tax reduction by tripling the standard deduction and personal exemption rates.

One wonders, what is a just system? Do we allow private equity principals to avoid taxation on their capital gain while dividends for mom & pop investors get taxed? Do we enjoy seeing a political system that will consume perhaps $2 billion or more in an election cycle? What about the Katrina refugees; do we enjoy seeing them living for months/years in trailers emitting formaldehyde fumes? Greenspan is right: Beware the political backlash this next election; changes are a 'comin.

He's a smart guy I remember him warning about the housing bubble before it burst. It's apparent people are losing equity and are in debt, and there are signs their equity will continue to decline, this scares homeowners and makes them worry what the future holds and what to do about it. Now he's forseeing the possible negative effects of a widening wealth gap. A small percentage of people are getting very wealthy while the middle class is declining into poverty. Whenever you have a minority of filthy rich and a majority of poor or lower middle class, as this larger group grows, there will be problems that can range from small to catastrophic. They can manifest by consumers refusing to spend out of spite, by workers giving less productivity or loyalty. By people no longer believing in the possiblilty of the American dream. People feeling trapped with lost confidence, even giving up. Of course the consequences can get even nastier than that, but I don't want to talk about over the edge mob mentality issues. I don't want to go there, I hope our country never goes there. Hopefully the people will vote for change, and the politicians will listen to "We The People" and do what is fair and just. Capitalism is a good concept as long as greed and corruption don't take over.

Absolutely, I think in the coming months there will be more uncovered in the subprime lending market and outfits like CFC are going to take some major dips.

About Greenspan changing his mind so often, that may be, but the conditions change and the data that available to him also changes so really can't blame him.

--Kevin
http://communityinvesting.blogspot.com

The biggest threat to the economy is that 70% of the tax payors are paying 50% to 90% of their disposable income in income tax. Demand that Congress immediately triples the personal exemption and standard deduction rates.

Greenspan is saying the same thing John Edwards said a year ago when he announced his Presidential bid. Al Gore said the same thing in his 2000 campaign--Gore the candidate who should have been elected President by the people instead of Bush by the Republican appointed Supreme Court.

The Republicans are the party of the wealthy and Bush's proposal to make tax cuts for the wealthiest 1% permanent benefit the rich.

This is the same administration who just last week vetoed a health care plan for children whose parents can't afford health insurance.

Contrast this to the Clinton Administration, who proposed changes to the health care system (but were blocked by Republicans). Or how the Clinton administration could balance the budget and create surpluses while the Republicans under Bush have squandered this surplus on a immoral and unnecessary war costing trillions of dollars and needless deaths.

Who is going to pay this war? Not the rich--they willget the tax breaks if the GOP has their way. Did anyone listen to what the current Republican candidates for President said at the recent debate in Michigan--a state suffering from a poor economy?

The Republicans want more tax cuts and more free trade at the expense of jobs for Americans.

Maybe Alan Greenspan needs to join the Edwards campaign for President. Edwards is the most electable Democrat in the top tier of candidates.

His negative polling numbers are much lower than Mrs. Clinton and Edwards can attract male voters, independents and undecided voters in addition to retaining traditional Democratic constituencies.

If you're rich--vote for a Republican. If you're not rich, vote for John Edwards for President and support him in your state's primary election or caucus, coming to you in early 2008.

Dear Mort:

Blogger #1--please see my comments (logger #6).

I think you are missing the point that Mr. Greenspan is trying to make!

We have anti-trust laws and the government (with Republicans leading the charge) ignores and nullifies them. We had usury laws and the Supreme Court invalidated the states approach while congress (with the Republicans leading the charge) failed to replace them (99.65% interest at Cash Call!). We had fair bankruptcy laws and the Republicans altered them to leave petitioners forever in debt. The government has a war on drugs that has our jails bursting and the largest fraction of citizens incarcerated of all nations on earth (including China and the Axis of Evil).

It is time for our government to take a more populist approach. They seem to have forgotten they represent the people not the corporations. It is not meant to be government for those who can pay the most money. It is government for and by the people.

Beware of the liars in our government who continue to cloak their self serving intentions in rhetoric that is intended to deceive their true goals.

Has Mr. Greenspan ever heard of walmart? Their war on the midle class is indeed widening the gap between the the haves and have nots.

Greenspan the fortune teller… do tell our future Mr Greenspan, what did you say? I am going to loose my home equity? I am going to loose my job? My money is worthless and my adjustable rate loan is going up again? That’s all great news.

Greenspan has always had an answer to rising prices and that answer was to raise rates! If oil prices went up he would raise the rate, if housing prices went up, he would raise the rate, if consumer goods rose slightly he would raise the rate, if profits went up he still would raise the rate. Then he would tell the public to work harder and produce more for less.

Americans work longer and harder than any other country in the world. In fact many Americans are now working two jobs just to afford the increases Greenspan economics have imposed on us.
You would think with all the superman economic information this man has to offer he could at least get the timing right. It seems to me he is always fortune telling after the fact.

Wake up Mr Greenspan its already too late housing prices have fallen, we are now in a recession like the last time you said this in 1990’s.

Didn’t you retire?

I believe Mr.Greenspan is wrong this time. (1) We are in a war economy, no one wants to admit it.
(2) Crude Oil Prices are high because the Hedge Funds and the Goldman Sachs of the financial world and Big American Oil Companies and lets not forget the Sheiks of the Middle East have investments tied to thier Oil being over $50.00 a barrel and who knows what the Bush Family deal is with there Middle East Ties.
(3) I believe if oil falls to the $25.00 a barrel level, the economy will not fall into a recession, because the falling crude oil prices in conjunction with the reduction in our War efforts in Iraq and Afghanistan will push a possible recession aside. If Oil prices fall the housing problem will go away. (4) The overbuilding of large over $400,000 homes and inflated prices of smaller townhouse like homes and inflated prices of Condo's in major cities like Philadelphia are the errors of the builders, The glut in housing will continue as long as the cost to purchase a home is 75% above the actual value of the new home.
(5) Mr.Greenspan while in office and raising the interest rates has hurt the little guy, and the working blue collar families, Credit Card interest is still too high, loans are are difficult to come by, and only the wealthy are earning bigger dollars.

Our Economy is on a War Footing, simply look at th Defense market, look at the companies making bullets, armored trucks, rifles, all there numbers and their stock prices are way,way, way up. as soon as troops start coming home, look for the lay-offs and the shutdowns at these factories.

The only way for this country to keep a recession at bay, is for the money managers raking in big bucks keep the Oil artificially high begin to let the oil drop to $25.00 a barrel.
If we allow the oil to fall to $25.00, the enemies of Democrat government in Iraq, will lose their "ARAB BACKED FUNDING."

I think Mr. Greenspan should be running for president for either party, because HE is one HELL of a used car salesman!!!

As an employer, watching the way employees spend their money, any shrcinkage between the haves and the have nots is their own dam fault. America is still the land of opportunity. Instead of acting like a rich person when your young and charging to do it people should grow their resources. As for Greenspan--he is a shrewed manipulator.

This report amazes me! Is Greenspan being used as a defensive blocker by the Fed to dispell concerns of the general public and investers a-like by saying "The system is working"....Huh?

And where's the "new" Fed chairmans oppinion on these issues? Is Greenspan being paraded about by the Fed to tone down these concerns?

Why would 5000 people attend a conference such as this, and then receive conflicting answers? Re-read the text of this report, talk about confusion and gobbly-gook!

Greenspan notes, income disparity is a "bugaboo". I say...Huh! It is not within the delegation of the Fed to determine who makes what monies and how one earns their income source.

A disparity between the "rich and poor"??? What is this man saying folks!

Last but not least....."the odds of ression"! Since the Federal Reserve is a Private Bank controled by an authority that can print our dollar at will, and a ton of these less-valued dollars are being printed as I write this, which are now on par with the Canadian dollar.

The banking instutions/morgage lending corporations created the chaos that we are dealing with...just ask yourself, why would a lender/bank "design" a loan that would in many cases result in foreclosure? Who "wins"...interest only with an adjustable....the Banks for a few years!

The stock market is doing somthing I have't seen for many, many years. The price of metals and oil is following the same trend as the Dow average.

Gary

Do not be afraid. The system will eventually self-correct. And even a bridge to get us from here to there with less pain, is available.
Just like no tree grows into the sky, no systemic problem digs itslelf a hole deep enough to go all the way to China. The rich-poor wealth and income divergence is a systemic problem. Some have beeen sending their capital to work while others are lucky if they have a healthy body they can send to work. Capital mostly generates more value than labor can and thus capital owners have been accumulating the wealth and earnings from their capital faster than someone only working with their labor has been able to do.
The system will correct via the increased value of financially empowered demand. and the widely available and unique features of Intangibles (esp. non-rivalry, increasing returns, network effects, etc.), coupled with the bifurcation of capital now going on, from something mainly on the supply-side to something also on the demand-side, both in tangible form and intangibles, but mostly intangibles. The age of most new value created from intangibles, that we are entering, will enable us to get out of our very limited either/or thinking and free us from conflict causing zero-sum wrangling. No utopia here, just the old law of supply and demand working.
Roger

Most of the people in forclosure,have been forclosed on,will be forclosed on have car payments,credit card bills and other unnecessary bills that have reduced there ability to pay the mortgage.They didnt save any or very little money.Many refinanced there homes a few years back and squandered the equity with purchases that were unnecessary to put it mildly.I for one feel that when you use long term money for short term purchases and responsibilities you are going backwards and you get what your hand calls for.If you were willing to get an adjustable mortgage and you werent improving your credit health before the 2 years of interest only period expired you made your own bed now move it out.Sub prime mortgages afforded people who couldnt otherwise get a home or allowed someone to get more home than they could afford get there foot in the door and gave them 2 years to improve there financial health to remain in the home by renegotiating there terms when it matured.Most didnt do that.An educated consumer is the best customer.Corporations run this country because the citizens are ignorant.You are responsible for your own financial health and if you dont educate yourself you will be victimized by corprate america everytime.So to all of the folks that are loosing there homes,START PACKING!!!!!!