Greenspan says credit crisis easing

Greenspan says credit crisis easing

 

MEXICO CITY – UNITED States financial markets, roiled by the collapse of the sub-prime mortgage market, have shown a ‘pronounced turnaround’ since March, says Mr Alan Greenspan, the former US Federal Reserve chairman.

The worst of the credit crisis is over, or will be soon, and there is now a ‘reduced possibility’ of a deep recession, he said in remarks via satellite to a conference in Mexico City last Friday.

 

Mr Greenspan’s comments contrast with his view in February that the odds of a recession were ’50 per cent or better’ and that the slump could be deeper than the previous two contractions.

 

The former Fed chief said that tax rebates to US consumers are bringing about increased sales. ‘There is a sense it is buoying the retail market,’ he said, adding that the US economy has shown a ‘remarkable resilience’.

 

A government report this month showed that US retail sales in May rose 1 per cent, twice as much as economists had forecast, as consumers spent rebates provided under a government economic stimulus plan.

 

Mr Greenspan said housing remains a ‘critical problem’ and financial markets may not recover fully until home prices stabilise, ‘perhaps by the end of the year’.

 

The US economy grew at an annual 0.9 per cent pace in the first quarter of the year, the government said late last month, in an upward revision that calmed the nerves of some economists.

 

The Commerce Department initially pegged first-quarter gross domestic product growth at 0.6 per cent, the same lacklustre pace as in the fourth quarter of last year.

 

The revision, in line with expectations, bolsters the stance of some economists who believe the world’s largest economy will avoid a recession despite a deep housing slump, a related credit crunch and soaring oil prices.

 

BLOOMBERG NEWS, REUTERS

 

 

 

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HIGHER SALES

 

 

There is a sense that US tax rebates are buoying the retail market, says Mr Greenspan.

 

 

Source: Straits Times

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One Response

  1. […] Greenspan says credit crisis easing By arthurkwok MEXICO CITY – UNITED States financial markets, roiled by the collapse of the sub-prime mortgage market, have shown a ?pronounced turnaround? since March, says Mr Alan Greenspan, the former US Federal Reserve chairman. … Online News and Information on… – https://arthurkwok.wordpress.com Just want to share a valid question that we should ask ourselves … By noreply@blogger.com (Wai Ling) … recession in addition to inflation will end up heading to stagflation that need much longer time to recover… The economy in US might spillover to the rest of the world eventually… Just like the old saying 'if the United States … Financial Freedom?! All In Our Minds! – http://financialfreedom-blog.blogspot.com/ United States Senate By hmzcpeasgb03(hmzcpeasgb03) Articles of impeachment exhibited by the House of Representatives of the United States of America in the name of itself and of the people of the United States . Our transportation infrastructure is critical to the economic well-being of … United States Senate – http://united-states-senate.blogspot.com/ […]

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