Former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession?

Actually the dip in the market was caused by anxiety in the Chinese stock market:

"The Shanghai Composite index sank 8.8 percent, in part on fears Chinese authorities would crack down on the speculation that drove the index to record highs this week. Other stock markets then fell like dominoes.

The Dow Jones industrial average and the Standard & Poor's 500 Index both closed down more than 3 percent, their biggest one-day percentage drops in almost four years, while the Nasdaq suffered its biggest fall since December 2002."

This is a global economy, so when one country experiences something like this, there is a ripple effect. This was not caused by anything Greenspan said, though he DOES have an effect, it is not this profound.

Three words - Plunge Protection Team (PPT)

The stock market fell to 7500 in the weeks after 9/11. During the last 4+ years, the stock markets experienced a "controlled" ascent where deviations of 1% in either direction were maximum. This "controlled" ascent continued into 2006 where the market exceeded 12000 and pretty much hung around there. With the US bogged down in Iraq and tensions increasing over Iran and North Korea (don't forget an "assassination" attempt on Dick Cheney in Afghanistan), the Plunge Protection Team decided to cash in.

The question is whether the PPT will continue to "cash in" based on knowledge of some impending event or will they try to calm the jittery nerves of Americans. We will see on March 10 when the regional summit takes place in Baghdad.

It wasn't Greenspan that caused it. It was the fact that the Chinese government took some action (implemented on Monday) to slow down the growth of the huge bubble in the Chinese stock market.

The Chinese people have money now and they are a very frugal people, so they've been investing their money, and driving stock prices to more than they're worth - i.e. a bubble. The government is acting to prevent a precipitous correction, which has had a ripple effect around the world.

It's not Greenspan, it's not Bush, it's not the GOP, etc.

Paul

The stock market hinges on a lot of different things and the words of this "old man" is only one of them-- the reason that he has the influence that he does is because he is extremely good at what he does and what he does is watch all of the indicators that show the balances and core read outs of all these other things that make up the total financial picture !!

I know that this might be a very new concept for you---but relavance and worthiness is not a necessarily youth driven factor !!!

I can't wait until the Bush Administration tries to lay this downturn on the newly elected Democratic majority !!! This one is going to be hilarious--- even in the middle of the turmoil that it creates--we are NOW going to start seeing the result of a man in charge with no clue in hell what he's doing !!!!

Yeah, weird that he did support both Clinton and GW Bush. It is actually the Asian markets in general. Not to get specific. And the U.S. market recovered some back. But I think U.S. market reacts way too much on Greenspan over Bernake.

His statement was a no-brainer.

Unless the U.S. takes some drastic u-turns on their economic and military policies we will probably see a depressiion that will make 1929's seem like a hiccup by comparison.

America 's resources are on the world market. The greedy are selling us out with no thought to posterity. They have pushed our economy over the summit, and its downward momentum becomes more and more difficult to arrest. At some point we will be unable to control it. The bubble will burst, and some other nation will rise as the new world leader.

Greenspan is privy to information that is not generally dispersed to the unconnected. What he says is often accentuated by what, and whom, he knows. He's been a major player for years..........

I easily have questioned myself what befell to Greenspan after witnessing his strikes and listening to his statements over the years. The extra moderen of which stand in stark assessment to his financial disaster in Rands e book, Capitalism the Unknown suited, and his different essays of that era. The replace looks extra profound than that of Christopher Hitchens going from a self proclaimed Trotskyite to a journalist whose perspectives regularly at the instant are extra in line with those of Neocons.

When he was chairman he would of never said anything like that. Yes he could be correct. With the devaluation of the dollar every one deep in debt. Living paycheck to paycheck. The flooding of cheap labor in the USA. Too many working class Americans on the government dole

That isn't what the dip in the stock market was a result of.

Especially in the Asian markets.

Sorry.

The better question is this: if the economy goes in the toilet tank, does that then solidify George Jr. as the most complete presidential failure in history?