Greenspan: U.S. "on the edge" of recession, but businesses are "in extraordinarily good shape"

[Amerigo Vespucci]

Greenspan says U.S. "on the edge" of recession

By Anna Driver and Eileen O'Grady Thu Feb 14, 10:08 PM ET

http://news.yahoo.com/s/nm/20080215/bs_nm/cera_energy_greenspan_dc

HOUSTON (Reuters) - Former U.S. Federal Reserve Chairman Alan Greenspan on Thursday said the U.S. economy is "clearly on the edge" of a recession. Greenspan said the economy will continue to erode until there is a stabilization of U.S. housing prices. "We have a long way to go" before housing prices hit a bottom, Greenspan told energy executives at the CERA conference. High oil prices are dragging on the economy, but the fact that they haven't done more damage shows its resiliency.

"It's a burden now," Greenspan said. He added that it's "quite remarkable" that the U.S. economy is "able to do reasonably well" with oil prices near historic highs. Crude oil futures hit above $95 a barrel on Thursday and went above $100 in early January. Greenspan again -- as he had last month -- said that the likelihood of the U.S. economy going into recession was "50 percent or better." He said the U.S. economy was growing at "stall speed."

"Stagflation is too strong a term for what we are on the edge of," Greenspan said. The subprime mortgage crisis would already have put the United States into recession if U.S. businesses weren't healthy in part as the result of years of low interest rates, Greenspan said.

"If businesses weren't in extraordinarily good shape, I have no doubt we wouldn't be asking if we're in a recession, but how long and how deep," Greenspan said. "Obviously, they (businesses) are not pushed for credit," said Greenspan.

[Lasher]

1. Alan who?

Is this the same guy who urged Congress in 2001 to reduce "looming surpluses" by cutting taxes?

[Hobarticus]

2. Sure...keep canning people to keep profits up...

...and everything's just fucking peachy, Al!

[radfringe]

3. oh ok, as long as businesses are in good shape

the rest of us can go "f**k ourselves...

problem is if we're screwed, and we're the ones spending money or in this case NOT spending money - won't be long before businesses will be in bad shape

[Yukari Yakumo]

5. Better translation...

The uber-rich are fine...

The rest of you, go die in a hurricane or something.

[ixion]

7. that is a very accurate translation

albeit tragic.

[izquierdista]

4. The important thing to understand here

is that it is vital that multi-national corporations do well. What good are all the layoffs, foreclosures, car repossessions, etc., if you don't have some CEO pulling in 100 million that you can look up to? We may live like peasants, but at least our lord and master is the richest one around!

[Joanne98]

6. Shut up Bubbles!

[flashl]

8. Which U.S. businesses?

Thousands of retail stores closed in Jan, the financial sector is laying off thousands, banks are laying off, the mortgage sector is disappearing, the big three auto companies are attempting to dump their entire full-time staffs, airlines are suffering, pilots are retiring in large numbers, even clear channel is dramatically cutting its budget and radio stations and most importantly a large number of states budgets are in the red.

After thousands of retail stores closed around the country, then, ecomagically, retail sales went up. It's a shell game.

Most of the funny money created in the shadow-banking sector that allowed false forecasting of economic growth is about to vanish.

Where are these businesses?

Whatever illusion that is still being held onto that suggest business wellness translates to an average Americans’ wellness must be dispelled.