before the House Oversight and Government Reform Committee
on Capitol Hill in Washington October 23, 2008. The hearing centered
on the role of federal regulators in the Wall Street financial crisis.
Also testifying with Greenspan are SEC Chairman Christopher Cox (C)
and former Treasury Secretary John Snow (R).
REUTERS/Kevin Lamarque (UNITED STATES)
The Financial Post
Friday, November 07, 2008
Alan Greenspan, former chairman of the U.S. Federal Reserve, said he is keeping an eagle eye on home and stock prices to get a sense of when the global financial crisis is nearing an end.
"It's important to recognize we are not in quite a freefall but something close to it," Mr. Greenspan told an audience of about 2,000 in Toronto Friday.
Only when house prices stabilize will there be any price discovery on soured market-backed securities.
He believes house prices "still have a way to go" down.
Mr. Greenspan said there was no doubt the U.S. economy was in a "very severe recession."
He said he has just finished looking at a barrage of recent data and has concluded the U.S. economy was sliding at "over a 3% annual rate."
"Indeed the early data for October suggest it is very more severe than that," he said.
He said it is important for world equity markets to stabilize as that makes capital available for investment.
"I suspect equity prices will lead the recovery in this particular context," he said. But he declined to say when that will happen.
"All bottoms look like the bottom we're looking at now" but it does not follow that this bottom will lead to a recovery.
More to come ...
Related Posts :
Sources :
- The Financial Post: Economy not quite in freefall, but close, Greenspan says, Friday, November 07, 2008
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