Greenspan ups ‘R’ outlook as ‘more than 50 percent’

Usually, when former Federal Reserve Chairman Alan Greenspan speaks --- especially when the “R” (for recession) word is used --- Wall Street listens, and the Dow Jones Industrial Average often reacts with a drop, as occurred several times last year.

But apparently that wasn’t the case Monday when the Dow climbed more than 100 points early in the session, only to fall back and close up 3.01 points, even after Greenspan’s remarks appeared in the Madrid-based El Pais newspaper, notes Grumpy Editor.

This time, the trading turnaround to an almost-flat close was attributed to worry that a large number of companies will post sharply reduced first-quarter earnings.

No mention of Greenspan was made.

However, Greenspan’s economic outlook in the interview did show a minute change from earlier utterances.  He told the Spanish newspaper:  “I would not describe the situation we are in as a recession, although the chances that we’ll have one are more than 50 percent.”

Four months ago, when he repeated earlier statements, he said prospects for a recession are about 50-50.

Greenspan also told El Pais that the U.S. has not yet entered a recessionary state marked by sharp falls in orders, strong rises in unemployment and intensive weakening of the economy.

“We would have to see signs of this intensification; there are some, but not many yet,” added Greenspan who ended his 18-year term as Federal Reserve chairman 27 months ago.