Greenspan Sees 1/3rd Probability of Recession

Former Fed Chairman Greenspan has put the probability of a recession in 2007 at 1/3rd.

March 6 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said there’s a “one-third probability” of a U.S. recession this year and the current expansion won’t have the staying power of its decade-long predecessor.

“We are in the sixth year of a recovery; imbalances can emerge as a result,” Greenspan, 81, said in an interview yesterday at his office in downtown Washington. “Ten-year recoveries have been part of a much broader global phenomenon. The historically normal business cycle is much shorter” and is likely to be this time, he added.

Wow, and I thought I was on the pessimistic side! This seems like a fairly high probability of recesssion. Sure the housing and auto-industry are not doing great, but so far there appears to be little spill over into the rest of the economy.

FILED UNDER: Economics and Business,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. SCSUScholars says:

    data, because the latter averages out important movements. But does he do better than the rest of us? Forecasting sensitive industrial commodity prices has been around almost as long as the field of macroeconomics. It’s hardly a new story. (h/t: Steve Verdon.

  2. Edgardo says:

    Greenspan continues to recycle his nonsense predictions. You should ask him what is his probability of recession for a normal year, otherwise you don’t know how abnormal this year is. Giving his thinking about the economy, you should also ask him about the probability of a recession for the next two years, three years and so on, and more important for which period the probability is close to one. How much are you willing to pay for this kind of advice?

  3. davod says:

    He is talking the stock market down. Just in time for the election season.

  4. Triumph says:

    Former Fed Chairman Greenspan has put the probability of a recession in 2007 at 1/3rd.

    I am putting the probability of Greenspan acting like a normal retired person and limiting his pronouncements to where you can get a good early-bird all-you-can eat fish dinner at 0.

  5. Pat says:

    Greenspan should STFU. His wife should do the opposite.

    Carter/Clinton/Greenspan making political/economic pronouncements after they are out of office is most unbecoming.

  6. Rick DeMent says:

    Sure the housing and auto-industry are not doing great, but so far there appears to be little spill over into the rest of the economy.

    As long as they keep pumping 300 to 500 billion into the economy in borrowed cash every year I would be suprised as well.

  7. Bandit says:

    He now consults the magic 8 ball before making any announcements

  8. Steven Plunk says:

    I agree with many here that he should stop this nonsense of speaking out. For years fortunes relied on his pronouncements and he was held is such high esteem. Now that he is no longer chair of the Fed he should realize what damage his words can do. With great power comes great responsibility and he needs to learn it.

    Bernake should ask him to tone it down or as Pat said STFU.

  9. Corey says:

    Today’s 250 pt market meltdown is further proof of a housing-driven recession. More details on my blog at http://infohype.blogspot.com