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  • August 1, 2010 at 6:09 PM #17785
    jpinpb
    Participant

    Don’t know if anyone saw it this morning. Thought I’d post. Meet The Press (video and print)

    MR. GREGORY: Dr. Greenspan, the Associated Press reported on a survey this week of economists, and we’ll put a portion of it up on the screen. “A bleaker outlook for the economy into 2011. The U.S. economic recovery will remain slow deep into next year, held back by shoppers reluctant to spend, employers hesitant to hire.” That’s according to an AP survey of leading economists.

    “The latest quarterly AP Economy Survey shows economists have turned gloomier in the past three months. They foresee weaker growth and higher unemployment than they did before.” The current Fed chairman, Bernanke, said the outlook is “unusually uncertain.” A little bit of newer generation Fed speak there. Does that mean–do you think that means the economy gets worse before it gets better?

    MR. ALAN GREENSPAN: Maybe, but not necessarily. I think we’re in a pause in a recovery, a modest recovery. But a pause in the modest recovery feels like quasi recession. Our problem, basically, is that we have a very distorted economy in the sense that there has been a significant recovery in a limited area of the economy amongst high-income individuals who have just had $800 billion added to their 401(k)s and are spending it and are carrying what consumption there is. Large banks, who are doing much better, and large corporations, whom you point out and the–and everyone’s pointing out, are in excellent shape. The rest of the economy, small business, small banks, and a very significant amount of the labor force, which is in tragic unemployment, long-term unemployment, that is pulling the economy apart. The average of those two is what we are looking at, but they are fundamentally two separate types of economy.

    MR. GREGORY: If you add in the housing crisis, which remains a crisis, do you think it’s possible that we get this double-dip recession that a lot of people fear?

    MR. GREENSPAN: It is possibly if home prices go down. Home prices, as best we can judge, have really flattened out in the last year. And while it is true that most economists expect a small dip from here, largely as a consequence of the ending of the tax credit, the data don’t show that at this particular stage. If home prices stay stable, then I think we will skirt the worst of the housing problem. But right under this current price level, maybe 5, 7 or 8 percent below is a very large block of mortgages which are underwater, so to speak, or could be underwater, and that would induce a major increase in foreclosures. Foreclosures would feed on the weakness in prices, and it would create a problem. So that–it’s touch and go.

    August 1, 2010 at 6:13 PM #585202
    jpinpb
    Participant

    MR. GREGORY: Where do you see unemployment as we move through the rest of this year and beyond?

    MR. GREENSPAN: I feel we just stay where we are. The–there is a gradual increase in unemployment, but not enough to reduce the level of unemployment.

    MR. GREGORY: We’re at or about 10 percent.

    MR. GREENSPAN: Well, we’re 9.5, and…

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    August 1, 2010 at 6:13 PM #585828
    jpinpb
    Participant

    MR. GREGORY: Where do you see unemployment as we move through the rest of this year and beyond?

    MR. GREENSPAN: I feel we just stay where we are. The–there is a gradual increase in unemployment, but not enough to reduce the level of unemployment.

    MR. GREGORY: We’re at or about 10 percent.

    MR. GREENSPAN: Well, we’re 9.5, and…

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    August 1, 2010 at 6:13 PM #585936
    jpinpb
    Participant

    MR. GREGORY: Where do you see unemployment as we move through the rest of this year and beyond?

    MR. GREENSPAN: I feel we just stay where we are. The–there is a gradual increase in unemployment, but not enough to reduce the level of unemployment.

    MR. GREGORY: We’re at or about 10 percent.

    MR. GREENSPAN: Well, we’re 9.5, and…

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    August 1, 2010 at 6:13 PM #585295
    jpinpb
    Participant

    MR. GREGORY: Where do you see unemployment as we move through the rest of this year and beyond?

    MR. GREENSPAN: I feel we just stay where we are. The–there is a gradual increase in unemployment, but not enough to reduce the level of unemployment.

    MR. GREGORY: We’re at or about 10 percent.

    MR. GREENSPAN: Well, we’re 9.5, and…

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    August 1, 2010 at 6:13 PM #586239
    jpinpb
    Participant

    MR. GREGORY: Where do you see unemployment as we move through the rest of this year and beyond?

    MR. GREENSPAN: I feel we just stay where we are. The–there is a gradual increase in unemployment, but not enough to reduce the level of unemployment.

    MR. GREGORY: We’re at or about 10 percent.

    MR. GREENSPAN: Well, we’re 9.5, and…

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    MR. GREGORY: Right. But I’m saying, is that where we remain, do you think?

    MR. GREENSPAN: Yeah, yeah. I, I would say that there’s nothing out there that I can see which will alter the, the, the trend or the level of unemployment in this context.

    August 1, 2010 at 6:14 PM #585838
    jpinpb
    Participant

    And I found this interesting (in bold):

    MR. GREGORY: Interest rates, how long before they start coming up? Do they need to stay low?

    MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move.

    And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

    August 1, 2010 at 6:14 PM #585946
    jpinpb
    Participant

    And I found this interesting (in bold):

    MR. GREGORY: Interest rates, how long before they start coming up? Do they need to stay low?

    MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move.

    And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

    August 1, 2010 at 6:14 PM #586249
    jpinpb
    Participant

    And I found this interesting (in bold):

    MR. GREGORY: Interest rates, how long before they start coming up? Do they need to stay low?

    MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move.

    And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

    August 1, 2010 at 6:14 PM #585305
    jpinpb
    Participant

    And I found this interesting (in bold):

    MR. GREGORY: Interest rates, how long before they start coming up? Do they need to stay low?

    MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move.

    And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

    August 1, 2010 at 6:14 PM #585212
    jpinpb
    Participant

    And I found this interesting (in bold):

    MR. GREGORY: Interest rates, how long before they start coming up? Do they need to stay low?

    MR. GREENSPAN: Well, the problem there implies that the government has control over those rates, meaning the Federal Reserve and the Treasury Department, in a sense. There is no doubt that the federal funds rate, that is the rate produced by the Federal Reserve, can be fixed at whatever the Fed wants it to be, but which the government has no control over is long-term interest rates, and long-term interest rates are what make the economy move.

    And if this budget problem eventually merges to the point where it begins to become very toxic, it will be reflected in rising long-term interest rates, rising mortgage rates, lower housing. At the moment, there is no sign of that, basically because the financial system is broke and you cannot have inflation if financial system is not working.

    August 1, 2010 at 6:20 PM #586264
    jpinpb
    Participant

    Anyway, the interview starts at about 20 minutes into the video.

    August 1, 2010 at 6:20 PM #585320
    jpinpb
    Participant

    Anyway, the interview starts at about 20 minutes into the video.

    August 1, 2010 at 6:20 PM #585961
    jpinpb
    Participant

    Anyway, the interview starts at about 20 minutes into the video.

    August 1, 2010 at 6:20 PM #585227
    jpinpb
    Participant

    Anyway, the interview starts at about 20 minutes into the video.

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