Greenspan warns of likely U.S. recession

Former U.S. Federal Reserve Chairman Alan Greenspan warned that the American economy might slip into recession by year's end. He said the U.S. economy has been expanding since 2001 and that there are signs the current economic cycle is coming to an end.

"When you get this far away from a recession invariably forces build up for the next recession, and indeed we are beginning to see that sign," Greenspan said via satellite link to a business conference in Hong Kong. "For example in the U.S., profit margins ... have begun to stabilize, which is an early sign we are in the later stages of a cycle."

Greenspan said that while it would be "very precarious" to try to forecast that far into the future, he could not rule out the possibility of a recession late this year.

- This, and the 9% drop in the Shanghai stock index, were the likely triggers of the recent global stock market crash.

(2007-03-07 12:23:39 SGT) [Biz] Permalink

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