Paper Economy: Dance of the Maestro

Monday, February 26, 2007

Dance of the Maestro

Its days like this that you get the feeling that paying too much attention to the “Maestros” terse and infrequent comments may be a bit naïve.

Greenspan spills little dribs and drabs of wisdom generally separated by months of silence and to a certain extent it appears that the Wall Street still yearns for every word.

But today Greenspan is no longer the Federal Reserve Chairman and many of his comments originate from speaking engagements that range from celebratory dinners to business conferences.

That being said, today addressing the “VeryGC Global Business Insights” conference in Hong Kong, Greenspan suggested that the US might slip into recession as early as the end of 2007.

Here are some of his quotes made during his address:

“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,”

“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…”

“The American budget deficit is clearly a very significant concern for all of us that are trying to evaluate both the American economy's immediate future and that of the rest of the world”

“We are now well into the contraction period and so far we have not had any major, significant spillover effects on the American economy from the contraction in housing,”