Tomorrow, Greenspan will tap-dance around the "R" word (recession)

[Bush_Eats_Beef]

Greenspan wrestling with rate 'conundrum'

Bond market investors see signs of economic slowdown

By Martin Wolk

Updated: 7:15 p.m. ET June 8, 2005

http://www.msnbc.msn.com/id/8148664/



Federal Reserve Chairman Alan Greenspan has given financial markets plenty to chew over this week with extensive comments about the unprecedented persistence of low, long-term interest rates. Investors are braced for more volatility Thursday when the 79-year-old Fed chief appears before a congressional panel to talk about the economy.

In remarks broadcast by satellite to a monetary conference in China late Monday, Greenspan ruminated on what he previously described as a “conundrum” — long-term interest rates that have remained low and even fallen despite the Fed’s yearlong campaign to raise short-term rates.

But in classic fashion for the sometimes enigmatic chairman, Greenspan’s comments were ambiguous enough to support both sides of a debate raging in financial markets over whether the low long-term rates signal trouble ahead for the U.S. economy.

“This was really the first time I have seen him talk about the economy and acknowledge that maybe the recent slowdown is more than just a passing phase,” said Mary Ann Hurley, a bond trader at D.A. Davidson & Co. in Seattle. She noted that Greenspan for the first time made note of the possibility that long-term rates could move below short-term rates, a condition known as an “inverted” yield curve that generally signals an economic slowdown or recession.

[acmejack]

1. Greenspan is a fool who has overseen the ruination

of the world's greatest economy. His name will be reviled in the future, provided anyone can still read (education casts money, which this country won't have for a long, long time).

[asjr]

2. He still has not realized if we do have a recession or a

depression (and I see it coming) he will be blamed by the WH. They will point the finger at him. Actually, he needs to be tarred and feathered on his stringy old body and run down Wall St.

[Warpy]

4. I think he will be reviled as an enabler

but let's face it, both parties have overseen the destruction of the US economy by their addlepated and ill considered dogma of free trade, one which is not reciprocated by most of the countries that have been looting this country's industrial infrastructure.

Greenspan's problem is that he's a rich old fart who bought into the same dogma when he was young and stupid and now finds himself in no position to tell the truth and contradict it.

He isn't the problem. He's just not the solution.

[RUMPLEMINTZ]

3. I think your getting a little

ahead of yourself. The definition of a recession is 3 consecutive quarters of negative growth and if memory serves me right last quarter came in at 3.7%. It is a bit strange to have the Fed raising short term rates and at the same time the 10 year is going down. I wouldn't worry about it too much unless inflation rises quite a bit. Got to keep an eye on that housing market too. Seems to be a bubble in some parts of the country, but it's better a bubble there than in stocks. You can't live in stock. :)