Stock Market Information

When looking into potential opportunities and insight into the state of the markets, it’s best to go to some of the tried and true sources of knowledge. Like him or hate him former Fed Chairman Alan Greenspan does know a lot about the economy. His outlook in a recent interview is a sober reminder of just how far down we may still have to go before to see the light at the end of the tunnel.

The Fed Chairman recently appeared for an interview on ABC, his outlook on the economy and potential recovery was fairly dire:

“Oh, by far,” Greenspan said, when asked if the situation was the worst he had seen in his career. “There’s no question that this is in the process of outstripping anything I’ve seen and it still is not resolved and still has a way to go and, indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes. That will induce a series of events around the globe which will stabilize the system.”

He also predicted that it’s likely we’ll see another big financial institution go down by then. He wouldn’t speculate as to who, but there’s no shortage of potential candidates. Personally I’d say Washington Mutual, but we’ll just have to wait and see. Greenspan also touched on Federal spending, saying that the federal deficit was beginning to spiral out of control. Tax cuts have historically been met with equal reductions in spending, which wasn’t the case when the Bush tax cuts were put into place. The deficit has ballooned significantly as a result. He said that the tax cuts that McCain will keep in place have no chance of succeeding without a “massive reduction” in spending as well.