Greenspan Warns: "We Have A Stock Market Bubble"

US equity markets stumbled notably as former Fed Chair Alan Greenspan told Bloomberg TV that "we have a stock market bubble."

Greenspan stuck to his usual discussion topics of low productivity and fiscal doomsday inevitability...

"Productivity has been dead in the water for the past 10 years...

I've never believed in the Phillips Curve...

Adding that "we've got to confront the budget deficit," concluding "we're dealing with a fiscally unstable long-term outlook."

Something we have heard before (in 2016) when Greenspan warned

"Entitlements are crowding out savings, and hence capital investment. Capital investment is the critical issue in productivity growth, and productivity growth in turn is the crucial issue in economic growth. We're running to a state of disaster unless we turn this around."

 

"This should be the central issue of the presidential debate. Unless and until we can rein in entitlements, which have been rising at a nine percent annual rate in the United States and comparable levels throughout the world, we are going to find that productivity is going to maintain a very low rate of increase"

Greenspan also doesn't really view recession as the biggest problem right now, he is concerned (rightfully so) about the longer term problem of low economic growth and soaring entitlement growth.

"I don't think that's our problem. Our problem is not recession which is a short-term economic problem, I think youhave a very profound long-term problem of economic growth at the time when in the Western world there is a very large migration from being a worker to being a recipient of social benefits"

But when Greenspan said the following...

"There are two bubbles. We have a stock market bubble and a bond market bubble. At the end of the day, the bond bubble will be the big issue."

Stocks began to stumble...

 

Stocks have tumbled back into the red (and even The Dow is red despite a 108pt gain from Boeing alone)...

 

 

As a reminder, back in August 2017, Greenspan said this...

"We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace."

It seems some market participants still listen to him?

Comments

Creative_Destruct just the tip Wed, 01/31/2018 - 16:17 Permalink

"we've got to confront the budget deficit," concluding "we're dealing with a fiscally unstable long-term outlook."

This gutless prick states the obvious but as a smarmy social-climbing kiss-up NEVER walked his talk and made the hard decisions to rein in liquidity in the face of the OBVIOUS multiple bubbles he created.

He started this serial bubble shit. And guess what? The Greenspan bubble-economy is now the NORM.

And with whiny pukes like the new Kennedy pandering to the "we choose both","we can have it all" free-shitter crowd ( hear cheers for this during Dem response to SOTU last night, excuse the Chappaquidduck car in the background $& the drool), unending budget deficits leading to bankruptcy are INEVITABLE. 

 

In reply to by just the tip

mkkby toady Wed, 01/31/2018 - 17:39 Permalink

He sounds like the few remaining rational ZH commenters.  Of course spending is beyond Jupiter nuts.  Of course entitlements (i.e free shit) are beyond batshit.

Both the red and blue team are competing to buy votes with free shit.  Conservatives are long dead and gone.  They better come back before there is nothing left but ruins.

In reply to by toady

MK ULTRA Alpha rccalhoun Wed, 01/31/2018 - 15:01 Permalink

He helped cause the 2008-2009 financial meltdown. Now he's trying to start a panic sell off.

A great many lost their houses and businesses because of Greenspan's insanity.

Greenspan modeled America to be a service economy and goosed consumerism at the same time as China's mercantile economic model was taking over. He even said we were to be a service economy, a neo-feudal serdom.

Greenspan is a One World Government operator, who has worked in the The City aka The London Banking district since he left the Fed.

If it's this bad, then he should have said something over two years ago. Now when the obvious is the obvious he comes out to crash the markets.

In reply to by rccalhoun

Giant Meteor American Psycho Wed, 01/31/2018 - 19:57 Permalink

Actual Alan Greenspan quote

"The whole period upset my view of how the world worked – the models failed at a time when we needed them most … and the failure was uniform,” he recalls, shaking his head. “JPMorgan had the American economy accelerating three days before [the collapse of Lehman Brothers] – their model failed. The Fed model failed. The IMF model failed. I am sure the Goldman model also missed it too. So that left me asking myself what has happened? Are we living in an unreal world which has a model which is supposed to replicate the economy but gets caught out by one of the most extraordinary events in history?”

 

Not actual Greenspan Quote

"In short, I made a pretty damn good living believing in and peddling errant erroneus bullshit, which eventually destroyed a lot of people, some real, and a lot of fake wealth and other stuff, and I have to admit I'd been rather clueless all along, although even now some folks still believe my bullshit, and so I must also conclude, it's all bullshit, and I find this fact rather surprising .. "

In reply to by American Psycho