Sunday, May 20, 2007

Does Greenspan really believe that a recession is likely later this year?

I have lost count of how many times I have seen a recent headline trying to connect Greenspan and the likelihood of a recession. The most recent was an MSNBC article entitled "Greenspan sees one-third chance of recession - Former Fed chairman reiterates his concerns about U.S economy", which continues the myth that Greenspan is saying that the U.S. economy will be in trouble at the end of the year.

Yes, Greenspan says that he sticks by his analysis that "there's a one-third probability of a recession", but the absurd and ridiculous nature of the press coverage on this point has forced him to point out the obvious:

"My arithmetic says if there's a one-third probability of a recession, then there's a two-thirds probability there won't be a recession," Greenspan told a closed-door Merrill Lynch investor forum, according to an official at the U.S. investment bank.

How could anyone state so clearly that the odds of avoiding a recession are twice as high as the odds of a recession and why should it be necessary to point out something so obvious? Clearly the media are out of control and lost in a sea of negativity.

-- Jack Krupansky

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