U.S. Recession will be worst since 1930s according to Greenspan

February 20, 2009 by · Leave a Comment
Filed under: Stock Market News 

Well are we just waking up to this fact?  I would also add that it should be the worst “depression” since the 1930s.  We broke some important technical supports on the Dow Jones Index today so I believe we will here markets technicians declare we have officially entered into a “bear” market and we should see a sell-off that will bring us to the next support levels which I believe are below 7,000.  Thanks Alan for allowing us to get into this environment by keeping interests so low after the tech bubble.  We should taken our recession like a man and not the easy way out.

News:

 Former U.S. Federal Reserve Chairman Alan Greenspan said on Tuesday the current global recession will “surely be the longest and deepest” since the 1930s and more government rescue funds are needed to stabilize the U.S. financial system.

“To stabilize the American banking system and restore normal lending, additional TARP funds will be required,” Greenspan said in a speech to the Economic Club of New York. The U.S. Treasury’s Troubled Asset Relief Program designed to help bail out banks has been partially successful, he said.

Despite his prognosis on the current downturn, Greenspan said the pace of economic deterioration “cannot persist indefinitely.”

He reiterated, however, that a housing recovery is a necessary condition for the end of the financial crisis, and said that “the prospect of stable home prices remains many months in the future.”

The stock market, meanwhile, is being suppressed by “a degree of fear not experienced since the early 20th century,” Greenspan said. “Certainly by any historical measure, world stock prices are cheap. But as history also counsels, they could get a lot cheaper before they turn.”

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