Fed’s Bernanke, Poole Counter ex-Fed Chair Greenspan’s Warning of Recession
Poole’s comment seemed to counter former Federal Reserve Chairman Alan Greenspan’s widely reported statement that a recession was possible later in 2007. Greenspan's comment, made on February 26, apparently triggered a widespread stock market sell-off on February 27. Greenspan also mentioned that the U.S. budget deficit was a significant concern.
Poole’s comment reiterated current Federal Reserve Chairman Ben Bernanke’s testimony to the House Budget Committe on February 28, which sought to reassure markets that the U.S. would continue to benefit from another year of its Goldilocks economy.
Poole added that he saw no reason for the stock market to decline much beyond current levels, since stock prices were not overvalued as they were before the 2000 decline.
Source: New York Times, "Greenspan Is Still Able to Move Markets", March 1, 2007; CNN Money, "Fed's Poole Says No Recession Coming", March 2, 2007.
Comments
Tsk, tsk Kimberly! I’m surprised to see you parroting this nonsense! Did you miss Paul Krugman’s prescient piece dated 2/27 on exactly this issue?
True market conditions are abysmal. The numbers released in government reports are being massaged big time.
Have a gander at this link. Check out the alerts then click on the ‘archives’. It’s like watching a trainwreck in slow motion.
Link
Shame on me for shooting the messenger but does the recession/depression cometh?
Oh yeah!
Point well taken. I guess I thought it was obvious that they were scurrying to reassure the markets, when in fact the markets often predict by about six months the true state of the economy.
So, the question remains, is this market sell-off like the one we had last summer…or like the one we had in March of 2000?
Stay tuned, as I plan to write more about this throughout the week.
Kimberly